Good news for travellers (I hope)

Quite simple. One of the contributing factors in the strengthening of the Can $ is foreign companies realizing that Canada is a good economy to invest in, so they pour foreign capital into Canada by buying up Canadian companies with merit. The stronger dollar now enables Canadian companies to shop the world for good buys, thus strengthening their bottom lines and making themselves less vulnerable to takeover. It's part of the "creative destruction" that is one of the driving forces of capitalism. If a Canadian company isn't in play, one way or the other, it's a sign that the company may lack merit.

Oh and hedging can be done by the smallest of businesses, it's not an expensive strategy, and can be quite profitable. The idiots running the 2010 olympics forgot to do it and kissed goodbye to quite a few millions. Makes one wonder what else they've screwed up.

The foreign companies buying up the Canadian businesses is a one time cash injection into the system that does not benefit the Canadian economy as most of the foreign investment money and profits will not stay in Canada but go to the country where the headquarters are located. Oil companes in Alberta are a prime example, many of their profits head to Texas. But I will argue that they are generating employment but no more then when the companies were owned by Canadians. On its own the rising Cdn$ dollar should slow down the events of foreign investment as the Cdn companies will cost more. The time when the Cdn companies look most attractive for foreign investment is when the Cdn$ is falling and interest rates are increasing.

I am confused on your arguement that the rising Cdn$ will allow Canadian companies to look for investing opportunities. When the Canadian economy is primarily made up of manufactuirng companies that export to the US, the rising Cdn$ results in less profitability for the companies and thus less disposable income for them to finance operations abroad. The $ may stretch further but it doesn't help when they have less $'s to play with. Your arguement would work for large businesses that do not export currently as their cash flow will not be effected with currency fluctuations.

I agree that hedging isn't an expensive strategy except when the hedge does not work the way you are wanting it to (ex hedging on the thought that the currency will increase in value when it actualluy decreases). This event happening could be a very expensive strategy. No matter the size of the company, if they do not have excess cash hedging is not an option.

Canadian companies are on a rather large buying spree right now. Magna just took a run at Chrysler. Onyx is buying anything and everything. Alcan is buying in India and considering Alcoa. The list goes on and on. Most sentient people knew the dollar was in a long term uptrend two years ago. And a neutral hedge is just a minor business expense, another form of insurance.

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<hr>Cdn$ is falling and interest rates are increasing<hr></blockquote>

That scenario is somewhat unlikely. One of the reasons the dollar is rising is that foreigners are expecting an interest rate hike in Canada.

Alcan is buying Alcoa? I think you've got that backwards skipper
Magna has failed to buy Chrysler, and oh by the way why would you be hyping a company that is heavily dependent on the Big Three, companies you consigned the 'the dust pile of history" in post #13? Have they recovered somewhat in the last few hours?
As for 'Onyx' (assuming you mean Onex), wouldn't they buy heavily abroad instead of here? How does that help Canadian exports??

I think you may have missed the "pac man" defense being contemplated by Alcan. The fact that Magna failed doesn't alter the fact that they are flush with cash and on the prowl, a well run operation that aren't whining about the Canadian $. They would have rebuilt Chrysler as a modern company not the dinosaur it is now. Onex is one of Canada's most succesful companies, it's a power house with operations around the world including Canada, all managed from Canada.

The more expertise Canada exports the better for Canada. Why are you so hung-up on making wigets and forcing Canadians to subsidize the operation.

Alcan can comtemplate all they like, if the share price offered by Alcoa is decent, they will become yet another Canadian subsidiary. They'll throw a few jobs at Quebec of course, de rigeur in these things.
I'm hung up on making widgets because that requires capital investment and often creates long term , quality jobs. In Canada, not Indonesia or India or China. Investment by foreign or Canadian companies is much less likely with a canuckbuck at par. I don't want a call center or 'service' based economy, not entirely.That is why.

Magna would have rebuilt Chrysler? I think they reached the same conclusion you did in #13 about Chrysler, though you seem to be backtracking on that one. You could be right though, they do have that intellectual powerhouse Belinda Stronach just itching for a crack at making those billions do the hokey-pokey.

Onex is a workout business, they love to buy, strip and flip. And managing from Canada? If it is so jolly here for manufacturers and industrial giants why isn't Onex building here?

Buying nukes just got cheaper ;)