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PostPosted: Tue Apr 03, 2012 8:23 am
 


Lemmy,

Would it be fair to say that there are things that effect our dollar and the price of oil far more than oil effects our dollar? And that those things tend to move both (oil and dollar value) in tandem.


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PostPosted: Tue Apr 03, 2012 9:42 am
 


There certainly could be. The problem with a statement like yours is that the price of oil is a number in and of itself. The value of the Canadian dollar is only a value in relative terms to every other world currency. For example, the downturn in the US economy has caused Canada's currency to appreciate dramatically over the past few years, relative to the US dollar. But a decline in the US economy, as a component of total world demand for oil, would have a negative impact on the price of oil. But that ignores global demand, as well as supply. And we know world demand has continued to rise, leading to overall, cumulative increases in crude oil prices, even during a US downturn.


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PostPosted: Tue Apr 03, 2012 9:57 am
 


What I got from Pecks's explanation is this... sorry Peck, I just seem to be giving the same argument as you, but in another way.

The price of oil and the value of the Canadian dollar may have little or no effect on each other... rather, there are other variables that tend to affect both of these fairly equally.


Last edited by raydan on Tue Apr 03, 2012 9:57 am, edited 1 time in total.

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PostPosted: Tue Apr 03, 2012 9:57 am
 


Gaaahh!

Damn you Lemmy, now you have added a great deal more requirements to my thoughts.

:D

Time to go do more thinking.

Thanks!


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PostPosted: Tue Apr 03, 2012 10:35 am
 


andyt andyt:
I'm not sure that just a ban on exports is the answer. The reason those logs are going out of the country, is because those buyers are willing to pay substantially more for them than the local mills. I had a friend in the lumber business who said he could sell a log to the US for $500 that MacBlo (at the time) would turn into $250 worth of lumber, ie half the money after all that extra value added. He said they were in the value subtraction business. So our mills need to be a whole lot more competitive. That's where the govt needs to look to see what if anything it can do.


Yeah, but could that be because there are US tarrifs that limit the demand for Canadian-milled lumber and therefore keep the price low? Americans want/need the lumber from Canadian forests, but the current system seems to limit the amount of lumber that can be sent directly to the US market from Canadian mills while US mills are fed a steady supply of Canadian logs.

By that same token, isn't the price of logs in the US market inflated because of their auction system and logging that is heavily concentrated on private-land?

It does 'feel; like we're subsidizing US lumber mills at the expense of Canadian mills. The US mills get to buy the cheapest logs (from Canada) and the sell the most expensive lumber, with less-expensive competition sidelined by tariffs.

I wonder how much of that US-milled lumber from Canadian logs makes its way back to the Canadian market.


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PostPosted: Tue Apr 03, 2012 10:44 am
 


Good points, not sure what the answer is. At the moment my impression was we're sending more logs to China, since the US market is so down.

I'm definitely for keeping the wood in BC and adding value here. But in part that requires our mills to upgrade and become competitive, otherwise we're just subsidizing them.

They're now talking about a serious fall down in available wood, because the pine bark beetle destroyed so much. They're apparently even looking at logging in parks. We'd better get our act together and make sure that whatever wood we still have is at least processed here. Industry and govt need to get together on this.


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