It is everyone's problem. Except right now, the dems have a majority and control the spending/Treasury.
It is everyone's problem. Except right now, the dems have a majority and control the spending/Treasury.
bamacre
Lifer
- Jul 1, 2004
- 21,029
- 2
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The more things change, the more they stay the same.
http://www.redorbit.com/news/g...llar_policy/index.html
That was in 2004, and it was all bullshit of course. Deficits weren't reigned in, and we had a weak dollar policy, a very weak dollar policy.
We saw how that worked out. :roll:
Here we are again, gov't telling tales of a "strong dollar policy," which is rather difficult to do when your interest rates are at zero. And we have a president who says we'll be reigning in the deficits, all the while, running trillion dollar deficits. And, the gravy, people trying to apologize for it all, still claiming that a weak dollar is "good for our economy."
Yup, the more things change...
http://www.redorbit.com/news/g...llar_policy/index.html
That was in 2004, and it was all bullshit of course. Deficits weren't reigned in, and we had a weak dollar policy, a very weak dollar policy.
We saw how that worked out. :roll:
Here we are again, gov't telling tales of a "strong dollar policy," which is rather difficult to do when your interest rates are at zero. And we have a president who says we'll be reigning in the deficits, all the while, running trillion dollar deficits. And, the gravy, people trying to apologize for it all, still claiming that a weak dollar is "good for our economy."
Yup, the more things change...
If you can't undertsnad will a weak currency is a bad thing, then you probably why a strong currency is a "good" thing.
US doesn't made everything, we need to import stuff as well. If we have weak dollar we would be spending more dollars then when need to import.
US doesn't made everything, we need to import stuff as well. If we have weak dollar we would be spending more dollars then when need to import.
come back after you slept it off
bamacre
Lifer
- Jul 1, 2004
- 21,029
- 2
- 61
There's no real simple answer to this. And there's a lot of unknown variables in your question. For example, what kind of product are you making? Does it come from the ground, like corn? Do you need to use oil to produce your product? Take Dell for example, how many parts inside a Dell are made overseas? If it became beneficial, could they get the same parts here instead? And beyond that, how do you plan to spend your profits? Trips overseas? Is your favorite wine made here or abroad? Do you owe a lot of money, or do people owe you a lot of money? Is the dollar low but stable, or low and still falling? Inflation hurts some people, and helps others. Whether it is generally good or bad for an economy overall is going to be debatable, and perhaps dependent upon other conditions as well.
First
Lifer
- Jun 3, 2002
- 10,518
- 271
- 136
^ A weak dollar is great for U.S. exporters like you and is what has helped U.S. production greatly since since the dollar has weakened in the recent decade (when it was far too strong in the 90's, so a cyclical reversal was quite predictable). So if you're a U.S. company with operations overseas, you can convert foreign currency into more U.S. dollars because (as the dollar gets weaker relative to these currencies) it takes more U.S. dollars for every fixed unit of foreign currency you need to purchase. Which leads to exporters here being able to out-price foreign competition. Which is why it's always funny seeing the kooks predicting doom for the dollar given that it is nearly infinitely inter-linked with the rest of the world economy (oil denominated in dollars as is foreign investment in general), making it literally impossible for the dollar to fail without the rest of the world failing, which we have a mutual incentive not to let happen. Which is why it was so easy to predict last year that when the U.S. economy started flagging from Lehman et al's collapse as a result of private mismanagement, that the rest of the world economy would suffer an even worse fate (they have and still are). Meanwhile the dollar has gotten weaker yet the U.S. economy has gotten much stronger since a year ago and a recovery/boom in 2010 is on the way (as I predicted and as the dollar kooks such as the OP failed to predict, as usual).
If the dollar continue to decline, US will run into a unique problem because its status as world reserve currency and trading currnecy.
Imaging all the countries around the world holding US dominated debt and forex reserve, and watching the value decline day by day and the US government continuing to run trillions of decifit that's going to continue to erode USD, what do you think those countries will do?
Not trying to scare you, the major economic power is turning anti-US by the day. Europe is trying to replace Dollar's position with Euro. Japan with its new prime minister is looking at more Asia centric political and economic policy, with talks like Asian Union. Oh and who can forget China, we all know how anti-US China already is. Russia too is also not too fond of US. If USD keep on declining, it will only give these unfriendly economic powers more excuse to push for an alternative world currency.
In the past, US rely on its status of world reserve and trading currency to stay strong and support all the deficit spending in the US. Its value is a bubble, it's big not because of it's own strengh, but an external factor to boost the demand. Like all the bubble, if that external factor suddenly disappear, the bubble burst.
When that bubble burst, watch out....
Not saying this will happen for sure, but if US gov/public continue to take on debt like it's doing, the probablity is looking higher each day.
Imaging all the countries around the world holding US dominated debt and forex reserve, and watching the value decline day by day and the US government continuing to run trillions of decifit that's going to continue to erode USD, what do you think those countries will do?
Not trying to scare you, the major economic power is turning anti-US by the day. Europe is trying to replace Dollar's position with Euro. Japan with its new prime minister is looking at more Asia centric political and economic policy, with talks like Asian Union. Oh and who can forget China, we all know how anti-US China already is. Russia too is also not too fond of US. If USD keep on declining, it will only give these unfriendly economic powers more excuse to push for an alternative world currency.
In the past, US rely on its status of world reserve and trading currency to stay strong and support all the deficit spending in the US. Its value is a bubble, it's big not because of it's own strengh, but an external factor to boost the demand. Like all the bubble, if that external factor suddenly disappear, the bubble burst.
When that bubble burst, watch out....
Not saying this will happen for sure, but if US gov/public continue to take on debt like it's doing, the probablity is looking higher each day.
There are down and upsides to a weak dollar, and if you look at any individual or company the effect might be positive or negative to them. Overall though, a weak dollar is inflationary in that the cost of everything that we have to import goes up, so the cost of goods sold goes up across the board.
More worrysome than the weak dollar itself is the reason for the weak dollar. The fact that it's falling rapidly is not the problem, it's just a symptom of massive deficit spending and a realization by the world that there's no end in sight for even more deficit spending.
IndyColtsFan
Lifer
- Sep 22, 2007
- 33,655
- 687
- 126
IndyColtsFan
Lifer
- Sep 22, 2007
- 33,655
- 687
- 126
I do. I take him very seriously. He has a 100% success rate at being wrong, thus, I have a 100% success rate of being right.
That's serious business.
Keep in mind, Dave thinks he's educated in everything, including meteorology, seismology, mechanical/structural/infrastructure/chemical/nuclear engineering, oil/minerology, finance/economics, and legal studies. In fact, he's a legend in his own mind and knows everything....everything wrong.
having a devalued currency is a good thing atm. Not sure what facts you have to back up your statements.
*edit* on average
more over how many 'empires' have had a fiat currency.
the only empire that had a fiat currency for any period of time was Britain, and that was after the gold standard drove it into depression
Success: The US trade deficit with the European Union nations .... from the EU perspective, anyway....
It did decline this month (to a more 'hysterical' average) after hitting around an annualized $100 billion deficit back in July.
We still import well over $20 billion of their stuff each month --- roughly 33% more than we send them.
I think the next report is out the second week of November for those so inclined to follow that stuff.
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