Par Dollars

The media picks up on the fact that the Canadian dollar is pegged to commodity prices. Finally:

Loonie vaults over 81 cents to 12-year high on US$ weakness, high oil
prices
TORONTO (CP) - The Canadian dollar topped 81
cents US Friday for the first time since the autumn of 1992 as the price of oil
hit new records and the American dollar weakened.

"This is still a negative U.S. dollar story as much as it is a positive
Canadian economy story," said Andrew Pyle, senior economist at Scotiabank. "To
the same extent, we're reflecting the strength that we've seen in energy prices
and the fact that we've seen oil prices this week are above $55 US a barrel."
The dollar was up 0.58 cent to 81.04 cents US at late afternoon.

The currency has made sharp gains this year as prices have soared for
Canadian commodities such as oil, nickel and copper.

Okay, let's follow this to its logical conclusion: an overvalued American greenback, combined with a long term aggregate demand increase in commodities as a result of a rising Chinese consumer market equals:

A huge increase in the Canadian dollar. Our economy and stock market are healthier than the US', and our government (love 'em or hate 'em) has been racking up surpluses. We're in good shape, and it shows. I think the reason we haven't gaining in dollar terms relative to Britain, is because their own economy is doing quite well, although they are in for some massive price shocks in the housing market because of the speculative bubble that has developed. Yikes.