Canada is the U.S.A’s number one supplier of oil. Everything that anyone can produce needs oil either as a component as in plastics and energy as in manufactured products such as military equipment or fuel for cars trucks and tanks. I’ve read that some believe that Germany lost WWII because Germany unlike Russia and the U.S. A. did not have easy access or control over oil mining. When the price of oil peaked in 2007-2008 Canada’s currency in relation to the U.S.dollar soared to over 10 cents above the value of the U.S. world currency. As the price of oil declined from 2009 to the present the Canadian currency declined 35% from its 2008 peak relative to the U.S. dollar.
As the value of Canada’s currency declined, now worth nearly 26% less than the U.S.world currency, house prices in Ontario’s Greater Toronto Area have accelerated to unsustainably inflationary values. While Canada’s oil prices descended and house prices ascended. mortgage rates decreased to previously unheard of levels
To date with all the public figures voicing consternation over rising house prices and rents, no one has publically mentioned the causes of this inflation and the now nearly 26% discount available to house purchasers with U.S. dollars (world currency) borrowed at near zero percent rates.
Here’s an old post from November 2015 that draws the same conclusions about the relationship between oil price and the Canadian currency when the loonie was worth a bit more than it was yesterday. It reminds me of when I had a conversation about the astronomical rise in the value of my neighbour’s “little house”; I said maybe its real price should be 25% less to reflect the value of the loonie relative to the U.S. greenback. He responded by saying he personally knew Middle East people who were then buying Canada’s real estate for cash. Yesterday we heard that Ontario’s premiere was going to charge foreign real estate buyers a 15% foreign buyers tax. Maybe its not just foreign buyers that need disciplining but everyone who is able to get cheap American currency to invest in Canada’s inflationary housing market, not included in the cost of living index where there’s no inflation.
Something called Carbon Capture Report comes up every so often when I put “peterderemigis” into Google. Today I opened it to see why my name was embedded, and found this: my old 2010 outburst about $150-a-barrel petrol when Canada’s currency was just about par with the greenback. Now oil has sunk to just over forty dollars per barrel U.S. along with the Canadian currency now worth scarcely seventy-five percent of the U.S.dollar as media celebrates the Climate Change conference of world leaders; with the leader of Canada’s Liberals about to pledge over 2 billion dollars for a future carbon free universe.