Shrinking Canadian dollar

her&I wrote:

John&Joey wrote:

her&I wrote:
...We also survived the $0.67 era but my fixed income value has eroded considerably since.

I saw this first hand with my F&MIL. They didn't know about inflation and what it could do to a fixed retirement income over 20+ years.

What should be a little scary to our northern neighbors (and here also) is in the US we have been experiencing 10-15 years of very mild inflation. Once our Fed's start to raise interest rates, that trend will stop. If our inflation does goes up, and the exchange rate gets worst, that will be a perfect storm for some with a fixed income.

I took an early retirement full pension offer in July, 1996. It was a very good package at that time but there has been a lot of life lived since then and that amount has lost it's shine. Fuel was in the $2.98 CND a gallon on July 1, 1996 and it is $6.56 CND this morning. The 1996 average retail cost of a dozen eggs was $2.85 CDN and is $3.87 CND this morning. Add 24% in exchange rate and that fixed income sure looks meager.

I know. I planned for it and took a fixed pension rather than one that paid more up front, then decreased when early CPP kicked in & again when OAS kicked it. I am glad I did, those 2 pensions kicking in have neutralized the inflation. I augment my income by being a wagon master for Mexican caravans. I do not make any money but it covers my winter travel. Life is pretty good. Except my wife ids on chemo for year, but her prognosis is good. She can't go to the US for obvious reasons but flies direct to Mexico to join me.

John & Angela wrote:

joebedford wrote:
Pension? You got a pension? Must be nice.

Gas here in Ontario is $1.16 here which is about $5.50US / gal. Diesel is less for a change.

Hmmm, 1.16 per litre is 4.40 Canadian per US gallon or 3.47 American at todays rate. Finger fault on the calculator???

Fuel price Conversion program in Excel. US-Canada-Mexico. Set security to low or medium for it to work. Do not save on exit.

CONVERSION

I fuels up my small classC , Ford E350, yesterday.

The pump shut off at $150.00, guess that is all it will do on a Visa card.

As it must be almost full, I did not bother to re swipe the card.
Next fill up will be in Michigan as we head to Duluth Min
then who knows where!

Fuel was in the $2.98 CND a gallon on July 1, 1996 and it is $6.56 CND this morning. The 1996 average retail cost of a dozen eggs was $2.85 CDN and is $3.87 CND this morning. Add 24% in exchange rate and that fixed income sure looks meager.

...the "inflation rate" in Canada over the past 11 years has been betwwen 0.3% (2009) and 2.9% (2011). Both 2013 (and it appears, 2015 is shaping up to be) inflation rates has been (will be) incredibly low (0.9% and the 2015 estimate: 0.8%). Our Central Bank will be actually lowering borrowing rates (for banks), and eventually, to consumers again (vis. claimed Canadian recession).

Everyone really has to look at their personal "basket of goods", and can more accurately calculate their own inflation rates Scenario A) if you grow most of your own food, don't drive, don't have any mortgage or bank loans, don't travel, and rely exclusively on Canadian Medicare, and are in a lower retirement tax bracket, what will your inflation rate be? It may be 0%, or perhaps 0.3% because of your insurance and property tax bills perhaps going up.

Now, Scenario B) if you have sold off your house, bought a used RV in good shape cash and live in it when in Canada, and travel in winter in it in to the southern USA: your major costs would be fuel (inflation rate could be huge, or zero), food (because you are no longer able to grow most of it), travel health insurance for Canadians for 65+ couple could cost $thousands, and now the big one: literally everything you buy in the US you, of course, must buy in USD (this year: an increase of 25% in cost for Canadian buyers!)...so, what will the inflation rate be for such a Canadian?

This year, we have seen the lowest percent of Quebecers going on vacation and traveling abroad ever recorded....HOWEVER, we have seen the largest influx of travelers visiting Quebec this year since records have been kept (so, this begs: who is visiting? Where to Quebecers go to on vacation?).

Currency, fuel and inflation prediction:

Impossible to predict. Only 1 or 2 economists in hundreds of thousands have been able to predict only 1 of the 3 successfully...but even this has been hit and miss (ie. predicting currency, fuel and inflation numbers is nearly impossible to do consistently; it is like predicting what the weather will be in the sky above a 5 square meter patch of ground somewhere in Kentucky, 3 weeks from today) LOL

Do not forget to factor in the significantly lower cost of food, fuel, campgrounds, booze, entertainment and dining out and many other things in the USA. Once you get to south Texas most costs should be about 30% to 40+% lower than Canada so your biggest costs will be travel insurance and getting there.

Once you get to south Texas most costs should be about 30% to 40+% lower than Canada so your biggest costs will be travel insurance and getting there...

....you bet. Excellent point. Once you net-out all your "major" expenses, the "Canadian" may be surprised (positively).

I always recall the cost of living in Mexico (from back in the very early '90s). Any "luxury" items (ie. any processed foods imported into Mexico; electronics equipment; tires; auto parts; the cost of telephone calls; the cost of electricity) were VERY high. MUCH more expensive than equivalents in USA or Canada. However, the cost of medical care was very, very reasonable, and health/accident insurance was very cheap for a Canadian working/living in Mexico...

Hello Folks:
It's to bad our Bank of Canada Governor has to figure that a lower Canadian dollar is good for the economy. It supposedly benefits the export industry. However we are trying to compete with countries and their low, low wages compared to our very, very high union wages and that just will never balance out. In the meantime, everyone else has to suffer for this as produce imports, equipment imports, etc end up costing much more and we the consumer pay for.
For us looking to go to the US this winter, I am definitely going to have to look much more closely. The plus 30% exchange rate is getting very hard to justify. I sure hope the dollar improves.

Without a doubt the currency does and always has had an affect on travel costs. I'm not sure I buy into the evrything is super cheap in the US. Probably depends where you go to. We prefer California to Arizona or Texas and of course that comes with a price but we actually find fruits and veggies to be similarly priced. Sometimes they are more in California. Again it will depend where you are in Canada. We are in a high produce area in Canada and are literally surrounded by orchards and small scale vegetable farms so its hard to compete with that. Fuel is cheaper in the US but we don't go through tons of that anyway (we drive smart car diesels) . I don't think RV parks are that much different.

The other thing is I suspect many of us have a US Canadian mix in our portfolios including real estate. Although that doesn't help the cash situation it certainly does from the Asset cash out point of view.

We are semi retired and only work in Canada in the summer. When we fully retire at 60 we will give up our US RV snowbird lifestyle and probably adapt to a Southern European RV snowbird lifestyle. Just the savings in health insurance cover the cost of the plane tickets to europe. :) We have enjoyed our North American travels and have seen 65 American and Mexican States but it is getting time for a change and we absolutely love europe. Overall I doubt it will be much different for cost. I think Morocco will be cheaper from what we have experienced but I can't see spending more than a season or two there. Time will tell.

With the bank of Canada lowering interest rates today and the US fed making noises about raising US rates, coupled with a projected flood of oil from Iran, the Canadian dollar could drop to 70 cents. That makes flying to a 3rd world sun spot a lot more attractive than taking an RV to the US. If I were an RV park operator in Yuma I would be getting worried.

When we fully retire at 60 we will give up our US RV snowbird lifestyle and probably adapt to a Southern European RV snowbird lifestyle. Just the savings in health insurance cover the cost of the plane tickets to europe

....this is a huge trend here in our region. MANY near retirees and retirees (many former RVers) have discovered southern Europe that we personally know, and spend 3, 4, 6 months in Spain, southern France, Morocco, and numerous other locales. Most of our friends don't even bother to book long-term digs before going! They just fly over, and shop for the cheapest/best long-term rental (very easy to do in South Europe, because our "winter" season is their "low" season, so TONS of super deals are there for the taking). Also, many of our friends rent a small car in Southern Europe long term (really cheap, if you shop around).

Eg. we looked into it last month with our neighbor who does the same: we could get excellent long-term travel insurance fly to Spain, rent a nice 2 balcony apartment in a stunningly-beautiful mountain village overlooking the sea, eat fish/seafood and drive all over the country exploring for a fraction of the cost of RVing for the same time-frame in Florida or Arizona.

We've been camping a lot this summer......in our truck camper on our mountain property! I have to get that last year's gas out of our truck soon (fuel stabilizer only lasts about 12 months) LOL !