geedee

I'm just wondering if it's possible that the UK is "spilling" its bad news now and suffering for it, while other Countries might well be "painting a rosy picture", or more rosy than it should be.

Canada, for instance.

The media paints (or seems to) the picture that Canada is built to weather the storm and has taken real steps to protect its citizens... and yet in the small community I live in, the truth is really quite different. There are stores closing down, loads of people we know or know of being laid off, and no real light at the end of the tunnel. They are actually collecting food for the "less well off".... food banks!

Then you hear of huge ore processing plants in Ontario (Hamilton) being bought by the ham shanks and being shut down (to help the US economy!) and you have to wonder how healthy is it here? And why is there very little comment in the "news" papers?

Or have I just missed it?

TheBear

I think if anything the Uk media have been too positive about the UK economy, especially the BBC (last night Peston was rabbitting on how we're heading into recovery).

Canada has got poor prospects in the short term as it is a producer economy, especially of raw materials, and will continue to be hit hard while global demand is so low. However, it did not have the huge financial sector that the UK had and so was not so exposed per capita to the CDO/sub crime mess...the UKs exposure was very high, and so the public debt incurred has been vast. Also Brown has thrown a tonne of money at the public sector which has softened the blow of the recession, but this money will soon have to stop and debt be paid down through higher interest rates, taxes and public sector cuts. This means that as the rest of the world starts to genuinely recover, the UK will not be able to get off its feet and will sink further into the mire created by our government and financial sector. Canada however, will be one of the first to benefit from a global upturn as commodity prices start to rise again (especially Oil at some point). Also, its structural deficits will be nowhere near the scale of the UKs so it will be able to resume investment in public services and infrastructure and possibly reduce the tax burden.

bsmith

Howcome the Canadian media seem on the whole pretty chuffed the CAD is staying high? With Canada being a "producer economy" surely this can't be helping things?

Deva

As in many countries there's a conflict between what is best for the economy and what is best for the national ego.

It's only 7 or 8 years since the C$ was worth US$ 0.62 and the currency was derided as the "Northern Peso". Many Canadians, the media included, see parity with the US$ as some sort of victory in their ongoing quest to be considered equal to, or better than, the US.

wheatsheaf

It really is amazing that Canadians arent being more vocal about the 'hollowing out' of the Canadian manufacturing economy. So many industries have sold to non Canadian businness, and to non Canadian shareholders that any commodity based recovery will be profitable more to non Canadians. The likelihood of Canada becoming a pool of slave labour to be tapped into seems to increase daily. The C$ will drop like the zimbabwean currency as soon as this disaster in waiting comes to pass. And like zimbabwe, people seem afraid to speak up for fear of incurring the wrath of majority shareholders. Or perhaps its better not to say anything as it could precipitate the worst.

Alan2005

This is just wrong. CAD will not drop when the recovery starts properly in a few years, oil will go up and CAD will go up with it; such is the worlds demand for oil. Doesn't even matter if the oil is not extracted by any Canadian companies, the cost of extraction is in CAD and that will be enough.

Simon Legree

What utter nonsense !!

mjwalker007

It seems that the CAD could stay strong for many years to come , if as it seems it is influenced by the price of oil.

These were comments from the head of Total, saying that in the years to come there could be a possibility of an oil shortage, therefore increasing the cost of oil ! However it seems very convenient from the head of an oil company to want to try and talk up the price of oil

http://news.bbc.co.uk/2/hi/business/8266200.stm

Alan2005

It's a balancing act for the oil companies - it gets too expensive and people find alternatives.

JonboyE

I am not sure this is necessarily so. The government will attempt to keep interest rates as low as possible to encourage a reasonable amount of inflation. The logic being that as inflation rises the debt shrinks as a % of GDP.

bsmith

...like what?

Alan2005

Like using less of it. This happened in the 70's.

TheBear

It may be reach a point where interest rates are no longer determined by the government but by the IMF or the money markets. No government wants high interest rates, but sometimes there is no choice.

As for Oil...don't get me started. The UK is in a permanent energy decline situation. Canada gets the majority of its electricity from hydro and other renewable sources. It has reserves of expensive Oil in the sands and gas trapped in the ice. As previous posters have said, even if the extraction companies are owned by foreign companies, the cost of extraction will be determined by the local labour market and authorities, and a significant percentage of the money will stay in canada somehow.

Globally, the owners and bosses of large organisations are making a grab for stuff, and we seem powerless to intervene, however, they can't do jack without the great unwashed to do their dirty jobs for them, and when demand increases again, labour costs increase. Unless canada opens the doors to millions of unskilled migrants like in the UK, the canadian people will be relatively protected.

bsmith

"Conservatives extend their lead over Labour to 17 points – the second highest ever in the Guardian/ICM series, which began in 1984. Conservative support is up two points to 43%, while Labour's has risen one to 26%. The Liberal Democrats, who arrived for their annual conference as polling took place, are unchanged on 19%".

The Guardian, not known for supporting the Tories, doesn't seem to think so.

greghal

Interest rates arent determined by the government, thay are set by the Bank of England which is an 'independant' body, although how independant is difficult to say!!