Decline of the Dollar

Considering the amount of travel I do, I have certainly been paying attention to the decline of the US dollar. Devaluation is often most notable when you can see the difference over time though.

Heading up to Canada for a wedding last weekend reminded me of this plenty. Since we hadn’t looked at an exchange rate chart, and were in the middle of the Sunshine Coast with no wifi, I opted to consult my nearby book to see what the exchange rate was looking like.

Big mistake! You’d think that a book published this year might have a somewhat accurate mark of the exchange rate. Yet while it point to about a 1.5 to 1 ratio, the true exchange rate ended up to be $1.03 Loonie to $1.00 Washington. Obviously not worth the math with most expenditures.

Even considering that I’ve been well aware of the decline of the USD, this one took me for a bit of a shock. I hadn’t been considering investing in Loonie as a way to make money. Yet if I had bought some Loonie back when I visited a dozen years ago, I would have made 35% on my investment. Kind of crazy to consider.

I’m not about to get into any serious currency hedging, but it is food for thought when it comes to where to invest. It does make me feel better that we have a number of investments in Canadian energy stocks. At least not all of our money is resting on Uncle Sam.

Another interesting find was this chart here that shows the relation between the decline in the dollar and the balancing of the federal budget. I’m interested to see if there will be any change now that the Dems have changed to a Pay-Go system of government (not being able to pass new legislation without showing where the money is coming from).

Always good to be paying attention to what your money is really worth. In the mean time, I don’t mind keeping a few Euros on hand just to not feel gouged the next time I pass through Europe and balk at the exchange rate.

Happy Loonie to You!

Miel