Economists predictions
Dear Editor,
”Strong dollar puts plants at risk, economist says”
What this economist might have also questioned is the need for the Bank of Canada to indeed allow such a ‘buy-out” at the hands of our main importers south if the border. The increasing ROI’s and the ROE’s can only hit the man on the street while giving the benefit to cross-border interests. Simply put, the net crude oil exports as example, of $25 billion would have been worth $50b instead at the 60c mark and not 90c.
It is no surprise that countries like China, Japan and India have been able to withstand the pressure from the Federal Reserve to up-value their currencies to the detriment of their domestic economy and for the man on the street making all this happen. To realise who in fact might be benefiting, it doesn’t take an economist to figure that out! Exxon Mobil (Imperial Oil in Canada) continue to record 60%+ in profits while production of refined crude drops 20%. It is also very unusual that most industries end up in a non-profitable state by reducing production. The oil refinery business is the exception. While production goes down, profits increase.
So really what the oil companies/refiners have gouged in the $45 billion or so in profits in 2006 - distributes itself at about $1500 per Canadian. Simple math that the oil companies have figured - we have’nt
B.Gonsalves
Pierrefonds, QC
