Sovereign wealth fund 'interesting idea': Flaherty

[Doctor Cynic]

Source: Globe and Mail

OSAKA, JAPAN — Prime Minister Stephen Harper's government is considering stashing the federal share of booming commodity royalties into an investment fund that would make purchases abroad to ease pressure on the dollar.

In an interview on his way to a meeting of Group of Eight finance ministers in Osaka, Japan on Friday, Finance Minister Jim Flaherty said he is intrigued by the Organization for Economic Co-operation and Development's proposal this week that Canada join other major oil exporters in setting up a sovereign wealth fund.

“I would not rule it out over time,” Mr. Flaherty told Bloomberg News between flights at the Vancouver international airport. “It's an interesting idea. We can look at it.”

The Paris-based OECD said in a report on June 11 that the federal government should save the revenue it collects from surging oil prices and use the cash to buy international assets. The goal would be to fight so-called Dutch disease, a term coined in the late 1970s to describe how the discovery of offshore oil ended up decimating the Netherlands' economy by driving up demand for the country's currency and pricing exporters out of international markets.

Read more: http://www.reportonbusiness.com/servlet/story/RTGAM.20080613.wflaherty0613/BNStory/Business/home

---

I say go for it. The oil wealth cannot be allowed to drive up the Canadian Dollar too much.

[provis99]

1. remember when we used to joke about the Canadian dollar?

Those times are gone. Now the greenback is the butt of jokes in Canada, I presume.