Rolo, that only happens for a while. At a certain point, the shift in "cost" in each of the countries makes many things that use to be worth buying from the other less of a bargain. You can get to a point where trade effectivesly shifts direction, with what was the high price producer suddenly becoming the low price producer.
Cross border shopping between Montreal and Plattsburg NY is up 50% in two months, according to a report on TV today.
In the short run, it can create a mini-boom in the US economy, as real estate and other assets priced in US dollars suddenly become much cheaper to foriegners, which brings in outside money. The downside, as happened about 15 years ago is that this creates inflation pressures, as people outside can afford to pay more than the people inside the economy.
It hurts everyone in some way when the balance is shifted, and when it is shifted so rapidly, it can really leave whole industries, existing trade partners, and potential future trade partners in trouble.
It really isn't good for anyone... worse for those suffering inside the economy in question.
Alex
__________________
Let's go to the edge of disaster Push the pedal and go a little faster Let's slam into a wall at ramming speed Let's go to the edge of a mountain Jump off and lets start countin' Hit the ground and tell me if it bleeds
|