Deutsche Mark per Canadian Dollar

Source: Statistics Canada, CANSIM using CHASS, v37454 Canada; German mark, noon spot rate average *Terminated*

The global fixed exchange rates until the early 1970's explain the lack of volatility between the Deutsche Mark and the Canadian dollar. After allowing the free-floating of currencies, the German mark rose fairly consistently relative to the Canadian dollar. This reflects the German export economy. Although not rich in natural resources Germany focused on high value-added products and until recently Germany was the largest exporter in the world based on market value. The transition to the Euro terminated the use of the German mark in 2001. This is a potentially disastrous policy move, as can be demonstrated by recent events. The Euro covers a huge area that does not have very strong labour mobility. This can be attributed for instance to language barriers. Unemployed Greek speakers cannot easily move to France for work, in the way Newfoundlanders or even Quebecers can move to Alberta. Troubled national economies in Europe, like the entire south of the continent (Ireland, Portugal, Spain, Italy and Greece) with terrible employment rates, will slowly disintegrate under the pressure brought on from the "generous welfare benefits" and the low revenues from huge unemployment and demographic decline. These nations cannot simply rely on their currency devaluing as the economic problems become obvious to the world, which would in turn boost exports (from lower costs for international buyers) and lower imports (due to higher costs for citizens). This market mechanism cannot work under the Euro. Instead we have the relatively better off national economies like Germany providing loans below market rates to Greece only to allow them to continue to run massive deficits. We'll see if the 'austerity measures' that are required as condition for the loans are implemented. This will only burden the slightly better off European economies with more liabilities, thereby bringing the entire continent closer to a much more massive economic collapse.