The Canadian dollar spiked upward by 1.90 cents today against the U.S. dollar, closing at  US$0.916.

The rising Canadian dollar corresponds with an 18-percent rise in crude  oil prices in May. Crude oil closed at US$66 today.

Canada is an oil producer—some would even use the word "petrostate" to describe the country, which has the second highest proven reserves in the world after Saudi Arabia.

So whenever international oil prices go up, it's usually matched by a  similar percentage  rise in the Canadian dollar.

The problem is that if oil prices rise too high, it slows the world economy. Former CIBC chief economist Jeff Rubin covered this cycle well in his new book Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization.

He claimed that high oil prices—and not asset-based commercial paper  linked to  subprime loans—caused the recent global recession. He also noted in  his book that consumption of oil in oil-producing countries has risen dramatically because of government subsidies to consumers.

Rubin believes there is an imbalance in supply and demand for oil around the world, and this will cause a troubling phenomenon: steadily rising oil prices, which choke off economic growth, causing economic disruption, followed by a drop in oil prices as demand eases.

But as soon as the economy starts to recover, oil prices will go up because there isn't enough to go around, especially with all that consumption taking place in Iran, Venezuela, Russian, and Saudi Arabia. That's in addition to  burgeoning demand for oil  in China and India.

As a result, oil prices could conceivably act like a yo-yo for years to come, which will cause even more volatility  for the Canadian dollar.

Some people could make a fortune if they time their bets properly. Others are going to get hammered. Businesses that import food from the United States or rely on tourists from south of the border could be in for some surprises.

The B.C. film industry has long been a beneficiary of a low Canadian dollar. I'm sure that the recent runup isn't going to make the producers of runaway Hollywood  productions any happier.