I think it is a bit of an end game to make economic predictions.  For instance at many of my speaking engagements last winter, some people were musing about a $1.15 US loonie.   The loonie’s noon rate at the Bank of Canada today was .9381 US.  That’s not to say it’s going to a $1.15 US, but it is what it is. Putting an exclamation mark on any economic prediction is always a tough call.

I’ve never bought into the Canadian dollar going to $1.15 US.  However, I told audiences last winter that there was no compelling argument for the Canadian dollar to go down.  It seemed to me with the Canadian economy booming compared to our American cousins, there didn’t seem to be much of a limit on the Canadian dollar.  I even made the argument that if the US Federal Reserve raised interest rates faster than the Bank of Canada we would see the loonie go down.  That didn’t happen but the loonie went down anyway.  It just goes to show you that I’m just as bad as the rest of them.

Still, talking about our economy is addictive to many people.  Or, maybe I should say that most males in our society are at least a bit hardwired that way.  It has always been my greatest challenge to build my female audience but after a 25 year career I’m still looking for that silver bullet.  Maybe it is that the females in our society believe nobody knows about the economy with any certainty, so they concentrate on the really important things in life like relationships.  I dunno, however I soldier on.

The problem is when I talk about relationships between interest rates and currency values that doesn’t have the same type of resonance as Ann of Green Gables.  I will never forget my time in Cavendish Prince Edward Island at the home of Anne of Green Gables.  The home is a lovely place in a fabulous part of the country full of things all about Anne.  Surrounding the house are people taking pictures of the house.  Then there was me wondering what all the fuss was about.  I still don’t get it.

If there are any female readers left, forgive me.  I know a tour of the Bank of Canada would not be as much fun for you, but I would love to sit down with the Bank of Canada Gov. and pick his brain.  I would just ask that you bear with me when I’m talking about all the wonderful relationships between currencies, interest rates, fiscal policy and central banks.

In many ways they are the nuts and bolts underneath our economy that churn and clank to make our economy work.  So when I see that some Canadian economic thinkers are now saying the Canadian dollar will go down to $.90 US, it makes me pause.  At the same time some Canadian economic thinkers are saying that we are going to avoid a double dip recession.   I find it my job to try to understand why and to add to the cacophony.  In southwestern Ontario where jobs are hard to come by and the recession has hit hard I’m hoping that whatever happens brings much economic growth back to this region.

From a Canadian perspective much of our navel gazing is always toward the south, especially during the July 4th weekend.  Ditto for most if not all of our economic growth potential lies to the south. So from my perspective I think it will be key to see future US federal reserve interest rate moves to gauge how the American economy will proceed.  Critical to Southwestern Ontario economic direction will be renewed economic growth in the American heartland.  However, increasingly much of our economic interdependence with each other is affected by outside markets overseas and elsewhere.  Who would’ve ever thought a few years ago the sovereign debt problems of an ancient country like Greece would affect jobs in a place like Southwestern Ontario.

Despite those problems, there is much we could do to help ourselves and that’s where Ann of Green Gables comes in.  If you have ever been to Prince Edward Island “Anne” is on everything.  They have “Anne” cups, “Anne” license plates, “Anne” soft drinks, and probably “Anne” toothpicks.  This week they even have the very popular American talk show, “Regis and Kelly” coming to Prince Edward Island.  They are marketing geniuses because in my mind who is “Anne”?  Millions of dollars of Prince Edward Island income depend on “Anne”.  They are to be commended for that.

So what’s ahead?  While I was writing this one of the most respected market analysts I know, tweeted that the loonie was headed to $.88 US.  However, I just wonder what “Anne” thinks.  In our current place, she is as good as anybody.