Canadian pounds...Canadian dollars.

The Canadian dollar was once a Canadian pound.

This is logical since Canada is a commonwealth country. This Commonwealth association remains active with 54 countries having historical links to the United Kingdom continuing to participate in this intergovernmental organization. Every couple of years the heads of government meet and represent the interests of nearly 30 percent of the world population. Australia is part of the new Commonwealth organization and will host the next meeting in 2011.

Canada becomes a Confederation in 1867 when the province of British North America (Canada), joined itself to the Atlantic colonies of Nova Scotia and New Brunswick. This was a declaration signed by Queen Elizabeth as the British North American Act. In passing time other colonies joined in as provincial territories federally responsible to the sovereign flag of Canada. In 1949, Newfoundland was the last to join.

In 1841, the Province of Canada ( Quebec and Ontario ), was trading Canadian pounds similar to the Sterling pounds of the UK. The years that followed was a time to consider which way to go with the Canadian currency. It was a choice between staying with the sterling silver UK system or opting instead for an Americanized decimal currency system.

In 1853 a gold standard was introduced in the Province of Canada and pegged the Canadian currency to a basket which included only the British gold sovereign and the American gold eagle coins.

A few years later the British gold sovereign continued to be accepted for trade but the Canadian currency had moved to a decimal system pegged to the US gold coin.

Paper money had been issued for years already and circulated in several denominations. The first bank to issue bank notes was the Bank of Montreal in 1817.

In 1870 Canada is a country and refers to itself as the Dominion of Canada. The banknotes ( paper money ) issued by the Dominion range in denominations from 0.25 to 50 thousand $. The shinplaster or quarter note was discontinued in the early 1900's.

By 1935 the Dominion of Canada notes are all replaced by paper currencies legislated by bankers and financial governors answering to the Bank of Canada. Canada was not yet complete and those areas not yet signed on had their reserves and their own issues.

At this stage Canadian pounds are Canadian dollars and they are legal tender.

In 1944 the Bretton Woods Agreement was signed and brought about a new gold standard by which most currencies were pegged. The Bretton Wood system stayed active until 1971. However there were periods when the Canadian dollar was allowed to float and find it's value according to speculator sentiment. From 1950 to 1962 the CAD traded nearly par with it's American counterpart. In the sixties the CAD returned to the gold standard peg of the Bretton Wood system. From 1970 to 1974 it was floating again and money market speculators moved it from its peg value of 92.5 cents to $1.0443.

Snowbirds were happy and flocking to the southern states for cheap vacations in the sun.

However the CAD started to tank, and tank, and tank, all the way to 0.70USD by 1985.

The Canadian dollar is considered a commodity currency and while it is a major currency that ranks 6 to 8 in its power of providing liquidity to the foreign currency exchange markets it is highly regulated by the price of oil and minerals and grains. The oil embargos of 1973-1974 caused panic in commodity markets.

There was some recovery towards par for the USDCAD from 1986 to 1991 but again the oil world fell into panic with the wars in the Middle East deserts and the gains towards dollar par fell to new lows by 2001.

If volatility is not a risk factor for you then consider that since then the oil quotes have moved oil futures contracts from 35 dollars to 150 dollars US and back to 50 and back to nearly 90. All the while the Canadian pounds turned Canadian dollars have swung with the commodity sentiment, or as others might put it...........commodity quote manipulation!!!!

That's the humble Canadian pounds turned Canadian dollars in a nutshell.

Par She Blows....Like a gusher......