Isn't it the US that is overspending, running chronic trade deficits and using borrowing and their printing press to fund their lifestyle? Canada puts trust in the US dollar to accept the goods we are selling, especially oil. With these moves, the US risks accelerating their decline as the preferred reserve currency.
Imagine if we have to start insisting on getting paid in Euros for the oil we sell to the US due to the instability these nincompoops are bringing.
en.wikipedia.org
Here's an article on the Triffin Dilemma. It's worth reading to gain a better understanding of global trade. You usually won't find any mention if it in mainstream media outlets. I don't think it's simplistic enough for most of the audience or journalists. A few people on TERB are aware of this economic concept.
(Economist Robert Triffin) noted that a country whose currency is the global reserve currency, held by other nations as foreign exchange (FX) reserves to support international trade, must somehow supply the world with its currency in order to fulfill world demand for these FX reserves. This supply function is nominally accomplished by international trade, with the country holding reserve currency status being required to run an inevitable trade deficit.
en.wikipedia.org
Regarding your last comment, you won't be the last person to mention this idea of charging in Euros, Chinese Yuan or whatever in foreign trade. The medium of exchange really doesn't matter in the global trade equation. If you dig deeper into it, it's the currency that trade surpluses are stored. Canada can demand Euros in payment but then they would need to find a home for the monetary surplus. (That theoretically could be done by significantly expanding the Canadian government's fiscal deficit and increasing the supply of govt. debt.)
The burden from absorbing excess global production (surpluses) is borne upon the U.S. allowing foreign countries to hold U.S. assets with a large amount in treasuries. The EU, China and Japan and last of all Canada do not want financial surpluses directed into their own currencies. This money would have to be spent domestically and/or abroad decreasing their surplus by virtue of the trade balancing equation. As the holder of the reserve currency and as what some call the consumer of last resort, the U.S. treasury and capital markets have been the most open in the world to accommodate global trade.
Note: The Triffin Dilemma is an economic concept that is politically benign. Progressives should take heart that the rebalancing solution is for China, Germany and other chronic surplus countries to direct more money towards consumption instead of continuing over-investment in production. The Chinese Communist Party literally states this goal, but it's been very hard to implement after thirty years of government support for the production sector (and the ensuing dependency).
www.ctvnews.ca
338canada.com
