December 10, 2007
International arbitrage in Christmas ornaments
At the current exchange rate, some Canadians could be doing very well by driving to the U.S. (we bought this at a Michaels store), importing these into Canada, and selling them a little below $3.49.
Possible explanations for this arbitrage opportunity include
(1) the packets were printed a couple of years ago when the Canadian dollar was worth less
(2) cheap Christmas tree angels attract higher tariffs or taxes in Canada
(3) there is higher demand (or less supply) of cheap Christmas tree angels in Canada, allowing the seller to charge a higher price.