almo Wrote:
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> Expect the American mills to pick up the pace over
> the next year. The Loonie (aka Canadian dollar) is
> at a high, over-inflated for it's value right now
> against the US dollar. The full effect of this
> surge will be felt about 3-6 months from now, as
> it can be more cost effective to not import
> Canadian wood. This will continue until a market
> correction can balance the two currencies.

Don't expect that correction to happen soon. This major decline in the U.S. dollar against all currencies (not just Canadian) is itself a major correction - probably permanent. For decades after Nixon "de-standardized" the dollar in the 70s, speculators have treated the U.S. dollar as just another commodity to speculate on, artificially and sharply inflating it against all other currencies.

Now that it seems to have lost its speculative luster, the US dollar will continue to fall, at least until a re-balancing of the resultant chronic U.S. trade deficit occurs. That will ultimately help the American worker - but it will also hurt the American consumer. The ultimate impact on railroads is that they will carry fewer imports, but maybe more exports (bet most of it goes by truck).

But I doubt the above is the biggest reason the the slump in Canadian Lumber traffic. Think "residential mortgage meltdown", caused not only by the predatory and deceptive business practices of some lenders, but also by the huge naievete of the average American.

Who'd a thunk it! that my little-old-fancy-tricky attempt to buy more house than I could afford, could make my favorite railroad bleed a little more.

Ooow! Is that a bullet in my foot!