Weak Dollar A Boost For Border Towns
There was a time Canadian shopkeepers like Peter Cardasco in Niagara Falls, Ontario, were able to offer Americans a built-in discount - a favorable exchange rate that allowed them to save a bunch of money.
"Well, you're looking, $2,200, so you're looking at a 40 percent off that: $800 … you save $800 on one piece of furniture," Cardasco told CBS News correspondent Cynthia Bowers.
That was then. Now the Canadian dollar has caught up with Uncle Sam's - and cross border traffic has done a 180. Four of five Canadians live within a hundred miles of the United States, and many are pulling out their passports - along with their credit cards - to take advantage of deals at American shops.
"It's been actually remarkable. In the course of the last 18 months, sales have doubled at the shopping center," said James Schlesinger, owner of the Niagra Falls Fashion Outlet.
There's no question Canadian shoppers are getting more bang for their buck these days, and while it might be nice to think their currency is on the rise, the truth is the U.S. dollars is falling and it's falling fast.
In just the last five years it's dropped 37 percent against the Canadian Loonie, 23 percent against the British pound and 30 percent against the upstart Euro.
The problem is America's nearly $550 billion trade deficit. When we buy more products than we sell, we flood the world market with dollars, putting so many out there that they become less valuable.
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"We're talking really really big numbers and that can't go on forever and this is the market's way of saying not only can't it go on forever, it's not going to - starting now," said Martin Eichbaum, an economist at Northwestern University.
The weak dollar could eventually make imports more expensive for Americans, but on the upside the U.S. products will sell cheaper overseas - and tourism will increase here at home.
Bowers asked one border-town shopper in the United States how much she's saved by crossing the border to buy.
"Over a hundred dollars for sure," she said.
The exchange rate may be a blow to America's ego, but a big boost to its bottom line.