Archive for Economy

Your Being A Bad Canadian Dollar…

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Posted by: Jonathan Ouellet

Picture of Loonie

I intended on commenting on the US Dollar’s (USD) acquiescence to the Canadian Dollar (CAD) last Thursday when I received an email from Yahoo!, but I have been too busy to do so. As a result of a the half point drop in interest rates by the US Federal Reserve on Thursday we found for parts of the day (first time in 31 years) the CAD to be worth more than the USD. The reason I bring this up is that I wrote a paper 2 years ago on the projected value of the CAD for an international finance and economics course. The inspiration that made me choose the topic of this paper came when the VP of the Canadian Central Bank came to lecture our class on monetary policy and the future of the CAD. The findings in my paper paralleled most economist’s predictions about the CAD and how it was projected to make significant gains on the USD (It was roughly at around $1.25 CAD/USD the day of the lecture). From what I remember, I concluded that the CAD would surpass the USD and possibly by about $0.10 ($0.90 CAD/USD) based on the economic indicators of the time. I am not current enough in my knowledge on recent indicators to give estimates on the what is in store for the CAD (and I would have to brush up on a lot of theory…lol). I still think that the CAD will remain strong at least for a while purely based on what I have been reading recently about the international markets. This is especially rings true when we look at the Chinese currency peg to the USD and the huge amounts of USD China needs to achieve this and how global trade has shifted to demand increasing amounts of commodities from our resource rich nation.

This high dollar does pose a major threat to to all our domestic export oriented firms (although import oriented firms will be rejoicing). We have been blessed for a long period of time here in Canada with a trade surplus which has aided out economic growth and has sustained us in harsher economic times. The economy over the last 30 years has been subsidized by a less valuable CAD, and this has had a definite effect on our economy and the competitiveness of our firms. With a rise in the CAD we are starting to rely increasingly more and more on outsourcing to remain competitive and this will only increase. There is some positive in all of this that we must not forget. The extortion of corporations and the immoral and selfish behavior towards society by unions will hopefully loose ground as an increasing number of union jobs are relocated to countries with a competitive advantage in the labor market.

All jokes aside though, this actually really sucks for me. As the CAD increase, the value of Silverback Apparel sales in the US will diminish as long as I am living here in Canada and eventually converting profits back into CAD. I guess that means I might have to price everything in CAD if our dollar starts doing any better. Anyways I am expecting an early November launch of my first products (October 31th seem unlikely but I’m shooting for the Christmas shopping boom) online and in retail shortly thereafter. Keep up to date with my progress at the Silverback Apparel website.

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Saving Money: Exporting Your Dental and Medical Needs Abroad to Nicaragua

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Posted by: Jonathan Ouellet

Dentists In Nicaragua

My two trips to the dentist this week really got me thinking about the differences between the cost of living here in Canada versus down in Nicaragua. The two trips that I made to the dentist (One for my annual X-Rays and the other for a cleaning) cost me $495.99 (221.88 + 274.11) which in my opinion is absolutely ridiculous ($250/Hour). It would have cost me only about half as much back in Vancouver due to the fact that I have been seeing that dentist for over 20 years, and had I been in Nicaragua about $25. What I am wondering is where is the extra value and how can a dentist justify charging 20x what the most expensive Nicaraguan dentist charged me when I went last  September and again in March. What I find funny is that the Nicaraguan dentist that I see is educated and trained in the US and is equally as professional in what he does as the one here in Toronto. There are only a negligible differences between the workmanship as well as equipment and technology, so once again I am confused as to where the additional value lays.

I am currently in need of getting all four of my wisdom teeth pulled which means that here in Canada I will be paying out another $1,600 minimum (unfortunately my company does not offer extended dental and medical insurance ;). What I have thought of doing is flying down to Managua and getting my teeth pulled down there because the dentist I see is equally as good at his job as my Canadian dentist. Another thing to note is that should any health complications arise, the Vivian Pallas Metropolitan Hospital is on par quality wise with what you would expect here in Canada or the US (at about 1/10 the cost). Although I would never trust them with heart bypass surgery or anything as technically difficult as that, I would with any surgeries that don’t have immediate ‘life or death’ consequences. When I do the calculations and I figure out all the costs flying to Nicaragua and having all four of my wisdom teeth pulled costs me just over half what it will cost me here in Canada.

Cost Price
Flight $650
Dental Work In Nicaragua $200
Total $850
Dental Work in Canada $1,600
Total Savings $750

What is funny is that this is the most expensive you will have to pay, because my friend flew down and got hers removed for $40 + the flight. So knowing that you could save a lot of money by going down to Central America for dental and medical work would you? And if you would what would you do with the extra money you saved? Recover at a hotel on the beach of 2 weeks maybe? This just goes to show how beneficial outsourcing is, and how much better off the world is with open economies….

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