Whoda thunk it?

[a nameless entity]

I don't see this becoming a reality. Heck, until I read the story I never would have dreamed anyone would consider doing this.

http://www.cbc.ca/news/business/story/2 ... oonie.html

Of course I was also unaware of what Ecuador and El Salvador had done.

[EvilGrins]

I'd'a thunk it.

Never underestimate the power of a loony.

[Hermskii]

What do you see good abd bad about this. I didn't get much from the read.

[a nameless entity]

Well it's no skin off of my nose or Canada's even, if the Icelanders go for this. It just never occurred to me that a foreign country would adopt another country's currency as their own. Which was why I was surprised by El Salvador's and Ecuador's decision to adopt the US dollar as their own.

One can understand the why of it, I suppose. Iceland's banking system was destroyed by speculators working inside their banks. They are broke. They want to join the EU, so adopting the Euro is a more likely scenario. But the Canadian dollar is more stable than the Euro at the moment, so that is the temptation for them it seems.

[Hermskii]

Very well explained. Thanks. Now I have more of an interest in this story. I did not know Equador used USD now. So all of my money I still have from living there is worth nothing now? DAMN! LOL. I lived there and in Lima, Peru for a few years back when I was a kid.

What dictates that the Canadian money is solvent? I know we used to have the gold standard here and now we don't. Too bad for us. We used to only be able to make as much money as we could cover with gold on hand. Now we can just make as much money as we want whenever we want. No really! Just ask Obama. He has mastered this practice!

The dollar is in real bad shape. I wonder if it could hurt Canada any to use their currency.

[a nameless entity]

Hey! Don't forget that it was Nixon who printed the money to pay for the Vietnam war, and kicked off the massive world wide inflation debacle that started in 1973, went to double digits, and lasted for at least 15 years.

You do not want to adopt someone else's currency. Without the safety valve of letting the dollar fall, you would end up like Greece. Pay off China with your devalued currency, then adopt a new dollar based on gold.

[Hermskii]

That was truly profound Nameless. Awesome.

[a nameless entity]

Profound? Really? I just put 2 and 2 together in that Greece is on the Euro and so has no safety valve of inflation. And I only learned how that works by listening to news shows that have a business component that explained how their use of the Euro was really limiting Greece's options. The USA is in a similar situation, but is not stuck the way Greece is, because the US has control over the money it uses.

What dictates that the Canadian money is solvent?

I know we used to have the gold standard here and now we don't. Too bad for us. We used to only be able to make as much money as we could cover with gold on hand. Now we can just make as much money as we want whenever we want.

Our debt ratio is in better shape than many other's, and our banking rules prevented our banks from screwing themselves as seriously as some other places did.

We were on the gold standard too, years ago. But the problem with that is that as the price of gold fluctuates, the value of your money goes up and down. With the wild ride that gold has been on since the crisis, any money on the gold standard would have dropped massively in value of late. That would cause problems with world trade, and currency trading between those on the gold standard and those that are not.