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had not rapidly increased its money supply, and consequently lowered

the rate of interest to allow support for debts in Brazil. The problem

of trade imbalance in the United States worsened as the U.S.

dollar rose in response to international capital seeking a safe

haven from the troubles elsewhere. Profits fell

in United States industry, but only temporarily. The contagion was

contained, and expansion continued in American and, by 1999 the West

Pacific Rim was beginning to recover.

Canada, perhaps one should say British Columbia, with

greater reliance on Asian markets, and Alberta with reliance on world oil

prices [which have been sustained by poltical instability and an unstable

unstable cartel in the Middle East], has suffered more than the United

States. The United State’s Golden Age is more tarnished. Canada’s Silver

Age is also tarnished. We wait to see what happens when Asia recovers.

It has been suggested that we are in the upswing of a Kondratief long

cycle, based on biotechnology and the internet, thought not to peak until

2010. If so, so much the better, for now.

Late Twentieth Century Capital Flows

Canada now has a favourable balance of trade with the United States, and

and unfavourable balance with the rest of the world. The balance with

the United States easily outweighs the balance with the rest of the world.

Still, the value of the Canadian dollar continues to fall, as it has since

the nineteen seventies. Past foreign investment, particularly from the

United States, still has to be serviced, and profits flow out to foreign

owned companies. Net unfavourable monetary flows, including net outflowss

of investment (about $130 billion over the past decade) outweigh net

favourable commodity flows, making it difficult to hold the value

of the Canadian dollar. Falling

interest of foreign investors in Canadian industry, particularly with the

unreliability of recent reverses in the fall in “commodity” prices,

including oil prices, has kept the Canadian dollar under attack, even with

lower rate of inflation that that of the United States

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