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Naturally I bought the Maestro's book, Alan Greenspan, The Age of Turbulence, early on September 17, the day it came out. I wanted to see if he said anything about me. There was just one sentence on page 212. Whew! What a relief!
The price on its dust jacket was $35 in the U.S. and $43.50 in Canada, the 24 percent difference presumably reflecting the exchange rate between the U.S. and Canadian dollars. The Prince of Darkness by Robert Novak had come out a little earlier with a 27 percent difference. My other September book purchases had similar differentials, the lowest being 21 percent near the end of the month. I buy a lot of books. I don't necessarily read them. But I buy them.
Since book purchases are the main way I keep track of the U.S./Canadian dollar exchange rate, you can imagine my surprise to learn that before September ended, the Canadian dollar had climbed to parity with the U.S. dollar. Or, perhaps I should say the U.S. dollar had declined to parity with the Canadian dollar.
Isn't it interesting that when the two dollars trade one-to-one, the U.S. dollar is called weak and the Canadian dollar is called strong. I guess what have you done for me lately is a question for currencies as well as for people.
If you don't hear from me for a while, don't worry. I'll be somewhere up north buying books with U.S. dollars and selling them across the border for Canadian dollars, which I will use to buy back U.S. dollars. Or, is it the other way around? I hope I don't get confused.
5 Responses to “McTeer on Dollars and Books”
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October 6th, 2007 at 7:11 pm
Dr.McTeer,
Can you explain to me how Monetary Base growth is still stable at two percent y/y? At a 4.75 Fed Funds rate, the Fed should be adding more liquidity to hit there target. Is this because Repos are only short term and don’t increase base growth because they come back to the Fed the next day? Also on the Feds balance sheet (H 4.1) I see reverse Repos but, on the New York Fed Bank temporary open market operations I only see Repos why is this? And can the Fed control Monetary Base and Fed Funds rate seperately?
October 9th, 2007 at 11:44 pm
I am a former pol sci prof doing investment management. I write a lot about how government institutions are misinterpreted by financial market professionals.
I read your work and watch you on TV.
Here is a question: Most people see Bernanke as the personification of the Fed. This is partly because votes are unanimous. They figure that he is deciding everything, perhaps missing the dynamics of consensus-building that other former Fed members have written about.
I would find your views on this question most instructive.
Thanks,
Jeff
October 15th, 2007 at 9:44 am
I’ve heard the internet rumors that the dollar’s value is dropping like a stone because the federal reserve does not back it up with anything of value(It used to be a gold standard now it is not- from what I’ve heard)
Just what does the F. R. have to back up it’s dollar?
I would feel better if the Fed started minting gold goins for those (like many others beside me) who have lost confidence in the paper and electronic money.
October 27th, 2007 at 12:06 am
I think the Canadiens are getting fed up with paying more in Canada for the same product sold in the USA now that our dollar is trashed.
January 31st, 2008 at 2:05 am
Thanks this post is delightful. I like your site.. thank you again