Tuesday, January 08, 2008

His Majesty Requests

His Majesty the RH Stevie Harper the First requests the presence of Canada's First Ministers,at 24 Sussex, two years after getting elected and with no consideration for the Premiers own First Ministers Conference.

Harper has summoned Canada’s premiers and territorial leaders to his official residence at 24 Sussex Drive Friday night. Harper’s office said the meeting is part of the ongoing discussions that the prime minister maintains with first ministers.

Right ongoing discussions...uh huh... what by email and phone, certainly there has been no FORMAL meeting between the PM and the Premiers since his election in 2006. Despite their demands for one. So much for Harpers much touted new, open, accountable, federalism.

The Gazette

Published: 12 hours ago

Prime Minister Stephen Harper, who has made it his policy to have as little as possible to do with reporters, seems to have taken the same position about the premiers.

His office announced last week that Harper will meet the provincial and territorial leaders over dinner at 24 Sussex Drive this Friday night. It's easy to imagine Harper starting to yawn and stretch just as the dessert dishes are cleared, saying "well, guys, it's been a long week ..."

The premiers, and especially Ontario's Dalton McGuinty and our own Jean Charest, have been asking for months for a meeting with Harper.

In recent decades, first ministers' meetings became frequent and an accepted part of Canadian governance, almost a separate level of government.

But the newly-elected Harper had one such a meeting in February 2006, also on a Friday night, and hasn't convened the group since.

It's almost as if he considered the premiers to be a bunch of poor relations who have nothing to offer except begging and grumbling.

And he is only calling the meeting now because of the perceived downturn in the Canadian economy. Daddy is going to tell the kids that it's belt tightening time again. Since the Harper believes in reducing federal interference in provincial affairs, the coming recession will have to be shouldered by the provinces on their own. Watch for it.

It was never clear how much a first ministers meeting on the slowing economy could accomplish. But the Prime Minister has gone out of his way to diminish the prospect of results at this Friday's gathering, and has ensured minimal coverage of the event with his offbeat scheduling. In a two-page letter written to the premiers and obtained by The Globe and Mail, Stephen Harper outlines plans for a four-hour discussion on Jan. 11 at his Ottawa residence, from 5 p.m. to 9 p.m.

But what Harper and David Dodge believe is a coming crisis for the loonie and the Canadian economy due to the American recession may not be the economic reality. After all as G.B.Shaw once said; "If all economists were laid end to end, they would not reach a conclusion. "

Loonie's rise may continue in '08, say experts

Even a 12-per-cent depreciation in the U.S. dollar, if it were sudden and disorderly, would hurt Canadian exporters directly, who would be paid in a deeply depreciated currency for many of their products, which are priced in U.S. dollars, and it would hit Canada's economy indirectly through a serious contraction in the U.S. economy, Canada's primary export market.

It would take a concerted effort by the world's major central banks to deal with such a crisis, Iacobacci says.

The problem is that they don't appear to have a strategy for dealing with such a crisis, he adds.

"You need to prepare in advance," he says, suggesting the central banks need to determine in advance what amount of support for the currency would be needed in and how it would be delivered.

But even if a run on the U.S. dollar is not be in the cards, a further appreciation in the Canadian dollar may be.

"I'm back to being quite bullish on the Canadian dollar," says Dennis Gartman, U.S. author of the influential financial newsletter that bears his name and is read by traders around the world.

Gartman, who two years ago predicted the loonie would reach parity with the U.S. greenback, says the Canadian dollar is poised to rise even further, but on its own merits, and not because of a run on the greenback, which he suspects is already oversold on world exchange markets.

"It's time once again to say the major trend is in favour of the Canadian dollar to rise, and not just relative to the U.S. dollar, but to rise even more relative to the euro," he says.

In fact he expects the loonie will be one of the strongest performing currencies this year.

"Has anything changed fundamentally that was driving the Canadian dollar higher relative to the euro and the U.S. dollar? The answer is no," he says. "Canada has the things that the rest of the world needs."

"You've got wheat, you've got canola, you've got base metals, precious metals, and most importantly you've got energy," he notes, adding Canada also has water, suggesting that over time that will become an increasingly precious commodity.

While Gartman won't make a prediction on how high the loonie will go, he "bet it makes a new high relative to the U.S. dollar ... ."

"I think we'll see Canada versus U.S. dollars higher than the best levels that were seen in November," he says, indicating it will at least top the $1.10 US, breached in 2007, and set a record high against the euro as well.

However, he also expects the Canadian currency will eventually retreat back to parity against the greenback.

There are others who predict the loonie's retreat will come sooner and go further.

The federal export promotion agency, in its latest forecast says: "We expect to see it below 90 cents US by the end of 2008. "

The reason is that a global economic slowdown will ease demand for Canadian export commodities and in turn reduce the speculation, that drove the loonie to new highs in 2007, it says.


Loonie Beats Dollar Benefits Who

Loonie Flashback

If It Ain't Broke

Harper The Autocrat

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