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  #1  
Old Posted May 1, 2023, 7:36 PM
LightingGuy LightingGuy is offline
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National Economy

I don't feel like hogging the "Provincial Economies" thread with discussion that is related to the national economy, so making a new thread.

I noticed that the USD-CDN exchange rate has been eerily stable the last few months. There was a massive surge in September, but since October the exchange rate has been stabler than it has in a long time.

Also if we zoom out, the exchange rate has actually been very stable since 2016, historically speaking.

Google USD-CDN

This stability has definitely made my life easier for importing products from the US, although I was a bit worried about upcoming projects during the Sept 2022 surge, but that has since subsided.
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  #2  
Old Posted May 1, 2023, 7:44 PM
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Bnn reported this morning that Trudeau promised more money in supports if job losses start to occur with what looks like a sofetning economy.
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  #3  
Old Posted May 1, 2023, 8:21 PM
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Yep saw that.

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  #4  
Old Posted May 1, 2023, 8:27 PM
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Justinflation continues should keep lio happy
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  #5  
Old Posted May 1, 2023, 9:21 PM
kwoldtimer kwoldtimer is offline
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Originally Posted by LightingGuy View Post
I don't feel like hogging the "Provincial Economies" thread with discussion that is related to the national economy, so making a new thread.

I noticed that the USD-CDN exchange rate has been eerily stable the last few months. There was a massive surge in September, but since October the exchange rate has been stabler than it has in a long time.

Also if we zoom out, the exchange rate has actually been very stable since 2016, historically speaking.

Google USD-CDN

This stability has definitely made my life easier for importing products from the US, although I was a bit worried about upcoming projects during the Sept 2022 surge, but that has since subsided.
Why not merge the two threads into a single "Great Canadian Economy Thread" or somesuch?
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  #6  
Old Posted May 1, 2023, 10:06 PM
casper casper is online now
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Originally Posted by thurmas View Post
Justinflation continues should keep lio happy
Actually it sounds like inflation is stable and expected to decline.
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  #7  
Old Posted May 1, 2023, 11:11 PM
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Actually it sounds like inflation is stable and expected to decline.
It's the Justinflation of housing (rents and mortgage costs) that I "care about". And it's definitely not declining, at least not here. Rents are higher than ever and still climbing. Even property values were still going up as well, last I checked, even with interest rates being what they are.
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  #8  
Old Posted May 2, 2023, 12:27 AM
Truenorth00 Truenorth00 is offline
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This should sum up Canada's economic choices and problems nicely:

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  #9  
Old Posted May 2, 2023, 1:43 AM
kwoldtimer kwoldtimer is offline
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Actually it sounds like inflation is stable and expected to decline.
Actually, inflation has been declining for several months and is expected to continue to do so, at a slowing rate.
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  #10  
Old Posted May 2, 2023, 9:38 PM
LightingGuy LightingGuy is offline
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This was in the US, but 1 more bank collapsed over the weekend, and 2 more are in danger of collapsing soon.

https://www.bnnbloomberg.ca/u-s-stoc...bets-1.1914625

This a strange recession. GDP is technically up, but with the increase in population, I'd say per capita is probably down.

Total employment numbers are up, but when you account for all the new people, are there more people looking for work now (instead of less)?

One thing that's for certain is that people are definitely pinching pennies a lot more now than they were 1.5 years ago. Tough to tell compared to 2019.
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  #11  
Old Posted May 3, 2023, 3:22 AM
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Canadian Business Insolvencies Rip Higher, Not Even Real Estate Is Immune

https://betterdwelling.com/canadian-...ate-is-immune/
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  #12  
Old Posted May 3, 2023, 6:59 PM
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Originally Posted by LightingGuy View Post
Canadian Business Insolvencies Rip Higher, Not Even Real Estate Is Immune

https://betterdwelling.com/canadian-...ate-is-immune/
Not really surprising. As mortgage/rent payments continually rise leaving people with less discretionary income, it's natural that the retail/restaurant sector is being hit hard combined with Amazon and food delivery. This combined with not being able to find enough workers due to their relatively low wages and/or not being able to offer enough hours for their workers to live on.

Construction is not a surprise either as developers have cut back on housing construction in order to keep supply low and hence prices high. Also there are so many construction workers retiring and few to take their place. This is a direct result of poor government and educational policy where decades of telling young people that the only way they will become successful, both financially and socially, is to have a degree is coming home to roost.
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  #13  
Old Posted May 4, 2023, 1:26 PM
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Over the past 3 years every electrician and electrical engineer I work with has told me the same thing - that the price of wire has gone up a lot and is very unstable. I assumed this price instability to be as a result of COVID supply chain issues - however I now see that it's a result of the global copper shortage.

Electrical contractors get all their equipment from electrical wholesalers. This includes everything from fixtures, breakers, conduit, wire, relays, switches, poles, certain tools, etc. Whenever most of these items are quoted, the quote is almost always honoured for 30 days so that it has time to get approval from every party (developer, architect, engineer, general contractor, electrical contractor all need to sign off on the shop drawings, and communication takes time).

Wire has always been the one exception to this - historically wire quotes are typically honoured for 7-15 days, rather than 30 days. The reason for this is because wire has very low margin (3% is common), and copper is a floating commodity.

In 2021 and supply chains got disrupted, prices in the electrical industry got extremely unstable, and manufacturers stopped handing out 30 day quotes. For about a year we saw 15 day or even 7 day quotes for fixtures, poles, breakers, and so forth. This only applies to electrical devices, and not wire.

Wire quotes, which previously were as long as 15 days, all of a sudden dropped to 2-3 days. I assumed this to be for the same reason as the rest of the industry, which was COVID supply chain issues.

Fast forward to about a year ago, and all of the electrical supply chain issues have been sorted out, and we are back to 30 day quotes for all electrical devices at every step. Great.

However, wire quotes are still only being honoured for 2-3 days while the rest of the industry has stabilized. I found this very strange, until I learned about the copper shortage.

Digging deeper into I now see that this is because of a global copper shortage:
1. The world uses more electricity than ever before.
2. Copper is the best option we have for electrical transfer - it is incredibly conductive, but doesn't get hot like aluminum. And it has been relatively cheap, historically.
3. Global copper discoveries have gone down significantly over the past 30 years, despite discovery budgets having gone up (source)

Unless massive new copper discoveries are made, this problem is not going to go away any time soon. In fact it's probably going to get worse since there is an ever growing demand for electricity.

Ultimately I think that copper is about to get a lot more expensive, and the electrical industry is going to evolve as a result.

We already have a solutions that require less wire to be installed:

1. Wireless communication technology has become extremely reliable, and you can now control all of your lights using wireless switches. This can save hundreds kms of wire on even a medium sized building.

2. Solar has become more affordable. A lot of outdoor lighting can now be powered using solar panels mounted directly to the pole, for example. This used to cost $20K per pole 10 years ago. Now it cost $5K per pole, and is cheaper than trenching or even directional boring, depending how far the wire needs to travel. Until now this has only really made sense for remote locations, but if the copper shortage continues, I think we'll see more widespread adoption of this. (Example)

3. Battery storage has become much better and more affordable as well, with constant innovation. Batteries have their own challenges with components that need to be mined, but I don't know enough about this to comment. All I know is that batteries today are better and cheaper than they've ever been.

Ultimately I think we're about to see all the "legacy" uses of copper transition to newer technology that doesn't require incredibly long wire runs. We're headed into a world, in my opinion, where every building generates its own power. This was already happening, and a global copper shortage will just add fuel to the fire.

My take on this is purely related to my own experience in the electrical construction industry, which is only one use of copper. But as a whole, I think we're about to see a massive de-copperization, so that we're not as reliant on this metal anymore. Plumbing industry uses a lot of copper as well for example, but I'm not an expert in that field.

Last edited by LightingGuy; May 4, 2023 at 1:58 PM.
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  #14  
Old Posted May 4, 2023, 2:36 PM
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^ interesting points re: copper. Anecdotally, I'm seeing more and more public light poles with small individual solar panels. I hadn't thought about the savings on wiring (both material and installation with digging etc.), but I still have to wonder about the overall efficiency of having one solar panel + battery for each light. I get that wire is getting expensive, but I don't see how it beats a battery which presumably contains lithium and a bunch of other rare metals. Still smells like greenwashing to me.
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  #15  
Old Posted May 4, 2023, 2:38 PM
Truenorth00 Truenorth00 is offline
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I started buying Copper ETFs half a decade ago because of the electrification trend.
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  #16  
Old Posted May 4, 2023, 3:25 PM
LightingGuy LightingGuy is offline
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^ interesting points re: copper. Anecdotally, I'm seeing more and more public light poles with small individual solar panels. I hadn't thought about the savings on wiring (both material and installation with digging etc.), but I still have to wonder about the overall efficiency of having one solar panel + battery for each light. I get that wire is getting expensive, but I don't see how it beats a battery which presumably contains lithium and a bunch of other rare metals. Still smells like greenwashing to me.
Ultimately economics are going to win, not ideology.

Using EVs as an example, only a small minority of people are going to buy an EV because they think it's good for the planet (even though it's not really all that much better).

The reason people will choose to buy an EV is because it is a much better car for them personally:
1. Much faster acceleration
2. Much more robust - batteries last longer than engines, and there are less moving parts
3. Far less maintenance - tire changes, breaks and wiper blades are about it
4. Cheaper to operate (gas > electricity)
5. Better use of space inside the car.

The four remaining obstacles of EVs for most people are:
1. Cost of the car
2. Limited ranges
3. Charging infrastructure
4. How long it takes to charge

All of these obstacles are being solved rapidly though. But these cars are going to need more copper than current ICE cars, and this copper is going to have to come from somewhere. This means that many of the legacy uses will need to be replaced with newer tech that uses less copper.

Whether or not the reduction in copper use elsewhere is enough to fulfill the growing demand for batteries (and solar panels) remains to be seen. I don't know how this is going to balance out. If we end up needing more copper and not less, then we either need more copper discoveries, or EVs simply aren't going to be the solution everyone thinks it is. And this doesn't take into account all the other rare-earth minerals, but I don't know nearly enough about those to comment on it.

Also, for some perspective on where we are in solar + battery evolution.

A typical pole-mounted LED light you see on a commercial parking lot is generally about 100W (this varies a LOT, trust me, but 100W is average). LED efficiencies have matured nowadays, so this wattage won't be changing much in the near future.

A typical solar-powered pole-mounted LED light is at most 30W. The cost to go use higher wattages simply isn't justified yet. Double the wattage means double the cost for the solar panel and battery. Right now it really only makes sense for applications where you don't have existing power nearby, and even then, you end up getting less light than you'd like. This is changing pretty fast though. I don't think we're that far away from all new outdoor lighting to be solar-powered. Ideology has had nothing to do with this process, this has all been economics. I don't think there were even any grants for solar-powered lights, but I could be mistaken.

Last edited by LightingGuy; May 4, 2023 at 3:39 PM.
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  #17  
Old Posted May 4, 2023, 3:29 PM
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1overcosc 1overcosc is online now
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Originally Posted by LightingGuy View Post
Over the past 3 years every electrician and electrical engineer I work with has told me the same thing - that the price of wire has gone up a lot and is very unstable. I assumed this price instability to be as a result of COVID supply chain issues - however I now see that it's a result of the global copper shortage.

Electrical contractors get all their equipment from electrical wholesalers. This includes everything from fixtures, breakers, conduit, wire, relays, switches, poles, certain tools, etc. Whenever most of these items are quoted, the quote is almost always honoured for 30 days so that it has time to get approval from every party (developer, architect, engineer, general contractor, electrical contractor all need to sign off on the shop drawings, and communication takes time).

Wire has always been the one exception to this - historically wire quotes are typically honoured for 7-15 days, rather than 30 days. The reason for this is because wire has very low margin (3% is common), and copper is a floating commodity.

In 2021 and supply chains got disrupted, prices in the electrical industry got extremely unstable, and manufacturers stopped handing out 30 day quotes. For about a year we saw 15 day or even 7 day quotes for fixtures, poles, breakers, and so forth. This only applies to electrical devices, and not wire.

Wire quotes, which previously were as long as 15 days, all of a sudden dropped to 2-3 days. I assumed this to be for the same reason as the rest of the industry, which was COVID supply chain issues.

Fast forward to about a year ago, and all of the electrical supply chain issues have been sorted out, and we are back to 30 day quotes for all electrical devices at every step. Great.

However, wire quotes are still only being honoured for 2-3 days while the rest of the industry has stabilized. I found this very strange, until I learned about the copper shortage..
I did a huge amount of electrical work in my house over the last few years and I can definitely confirm that wiring has gotten insanely expensive.

Changes to the building code (at least here in ON) in the last few years hasn't helped with electrical costs either; safety requirements have gotten a lot more stringent so GFCI and tamper-proof outlets are required in a lot more places than they used to be which cost a lot more. I wouldn't be surprised if the combination of code-flation and copper inflation have together increased the electrical component of residential construction costs by as much as 5x in the last 5 years.

As for the batteries, lithium is actually pretty abundant, but it's often in very low concentrations whenever it is found which makes mining it expensive & energy intensive and generates lots of rock waste. "Rare earth metals" are the same way; they're everywhere but in miniscule concentrations.

One challenge of course with mining is that we need a lot of these minerals for electrification and decarbonization but environmentalists tend to oppose new mining projects; a lot has been said on this topic already.

I follow developments in space very closely and there's a surprising number of experts who believe that mining in space isn't actually that far off. Last year, the US launched the DART mission to experiment with deliberately altering an asteroid's trajectory, ostensibly for planetary defense research. Dr. Pippa Malmgren speculates that one of the real objectives of this concept is actually to direct near-earth asteroids to crash into the moon, where automated refineries could refine ores from the crashed asteroids and export the metals to Earth. Supposedly a lot of refining and metallurgy processes are actually a lot cheaper/more energy efficient in low gravity, and environmental regulations are obviously far less of an issue. Sounds far fetched to me, but maybe that's how we're going to satsify our copper needs this century!
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  #18  
Old Posted May 4, 2023, 3:35 PM
WarrenC12 WarrenC12 is offline
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Load up this chart and go to 20 years, the price of copper has bounced around a lot but we are in a similar price range as we were in 2006.

https://www.macrotrends.net/1476/cop...cal-chart-data

I don't doubt the demand is there and increasing, but the market (miners) are obviously responding.
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  #19  
Old Posted May 4, 2023, 3:49 PM
LightingGuy LightingGuy is offline
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Originally Posted by WarrenC12 View Post
Load up this chart and go to 20 years, the price of copper has bounced around a lot but we are in a similar price range as we were in 2006.

https://www.macrotrends.net/1476/cop...cal-chart-data

I don't doubt the demand is there and increasing, but the market (miners) are obviously responding.
Thanks for the link, provides good perspective. There seems to have been a massive price run up starting in 2000 though, which seems to line up with the slow down in discoveries.


https://www.mining.com/chart-copper-...eries-elusive/


https://www.macrotrends.net/1476/cop...cal-chart-data
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  #20  
Old Posted May 4, 2023, 4:22 PM
WarrenC12 WarrenC12 is offline
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Yes definitely driven by "the internet revolution" in the broadest sense. I do think the market will sort itself out and we're not into some permanent shortage situation.

Major discoveries vs. mining output is something to monitor too. Like other commodities, when the price drops, new discovery slows, and then when demand rebounds, they are years out from finding new sources and the price spikes
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