s worsened as the U.S.dollar rose in response to international capital seeking a safehaven from the troubles elsewhere. Profits fellin United States industry, but only temporarily. The contagion wascontained, and expansion continued in American and, by 1999 the WestPacific Rim was beginning to recover. Canada, perhaps one should say British Columbia, withgreater reliance on Asian markets, and Alberta with reliance on world oilprices [which have been sustained by poltical instability and an unstableunstable cartel in the Middle East], has suffered more than the UnitedStates. The United State's Golden Age is more tarnished. Canada's SilverAge 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 longcycle, based on biotechnology and the internet, thought not to peak until2010. 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, andand unfavourable balance with the rest of the world. The balance withthe 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 sincethe nineteen seventies. Past foreign investment, particularly from theUnited States, still has to be serviced, and profits flow out to foreignowned companies. Net unfavourable monetary flows, including net outflowssof investment (about $130 billion over the past decade) outweigh netfavourable commodity flows, making it difficult to hold the valueof the Canadian dollar. Falling interest of foreign investors in Canadian industry, particularly with theunreliability of recent reverses in the fall in "commodity" prices, including oil prices, has kept the Canadian dollar under attack, even withlower rate of inflation that that of the United States ...
