is a weaker dollar better or worse?

[alphatarget1]

doesn't a weaker dollar help us in trading?

 

[dullard]

A weak dollar makes it difficult for us to buy foreign things. That is if you want a nice foreign item, you have to pay more of your hard earned US currency for the item when there is a weaker dollar. A weak dollar makes it easier for foreign countries to afford our things. That means our companies can sell more of their products internationally. Summary: a weak dollar hurts US consumers (and US businesses that import foreign goods) but helps US businesses that export.

Note: what I said above is a major simplification of reality though. Many companies choose to eat the loss when the value of the currency changes. For example Honda and Toyota have kept US prices the same on their vehicles but are just earning less profit per vehicle. So in reality things can be quite different from the theory I mentioned above.

 

[ElFenix]

thing is we've spent so long collecting money from everyone else that we're paying it back now.

 

[Lonyo]

Weak doller meansmore exports, as things are cheaper for others to buy, and more expensive imports as things are more expensive for you to buy.

It's good for exports, but not imports.

 

[FoBoT]

for who?
depends on who you are

 

[StageLeft]

Bad for me - I still pay canadaian student loans. For a while $1 = $1.5 CAN and now it's around 1.33. I want one US to = 400 CAN and then I'll pay them all off!

 

[Flyermax2k3]

In theory it means more exports but in reality (the current recession) countries are importing less and less of our goods. The trade deficit just continues to grow as does inflation. These do not make a good combo for recovery...

 

[isaacmacdonald]

keep in mind that most of the world doesn't mind a slightly weaker USD, but no first world country wants an all out decline because foreign debt is frequently denominated in USD. In addition lots of the less affluent countries (even the ones not looking to dollarize) use the USD as part of their reserve system.

Sizeable depreciation of the US dollar would result in a massive drop in the liquidity of global markets, which isn't good for anyone.

 

[Miramonti]

countries like japan loathe a weak dollar because it makes their exports more expensive to us, hurting their efforts to rebound from a bad recession. It however has gotten weak because of our tax cuts and debt issues (assisted by the tax cuts).

 

[rahvin]

Originally posted by: isaacmacdonald
keep in mind that most of the world doesn't mind a slightly weaker USD, but no first world country wants an all out decline because foreign debt is frequently denominated in USD. In addition lots of the less affluent countries (even the ones not looking to dollarize) use the USD as part of their reserve system.

Sizeable depreciation of the US dollar would result in a massive drop in the liquidity of global markets, which isn't good for anyone.

On the contrary, there are quite a few countries that want a strong dollar because it allows them to maintain a strong trade imbalance with the US. Japan is one.

http://story.news.yahoo.com/news?tmpl=story&cid=1471&ncid=1471&e=5&u=/ibd/20031008/bs_ibd_ibd/2003108feature

 

[isaacmacdonald]

Originally posted by: rahvin

Originally posted by: isaacmacdonald
keep in mind that most of the world doesn't mind a slightly weaker USD, but no first world country wants an all out decline because foreign debt is frequently denominated in USD. In addition lots of the less affluent countries (even the ones not looking to dollarize) use the USD as part of their reserve system.

Sizeable depreciation of the US dollar would result in a massive drop in the liquidity of global markets, which isn't good for anyone.

On the contrary, there are quite a few countries that want a strong dollar because it allows them to maintain a strong trade imbalance with the US. Japan is one.

http://story.news.yahoo.com/news?tmpl=story&cid=1471&ncid=1471&e=5&u=/ibd/20031008/bs_ibd_ibd/2003108feature

err. I think you missed the gist of my statement. while countries may favor slight differences in either direction, virtually no one in the global market wants a massive decline in the value of the USD (loss of global liquidity == doomsday scenario).

 

[rahvin]

Originally posted by: isaacmacdonald

Originally posted by: rahvin

Originally posted by: isaacmacdonald
keep in mind that most of the world doesn't mind a slightly weaker USD, but no first world country wants an all out decline because foreign debt is frequently denominated in USD. In addition lots of the less affluent countries (even the ones not looking to dollarize) use the USD as part of their reserve system.

Sizeable depreciation of the US dollar would result in a massive drop in the liquidity of global markets, which isn't good for anyone.

On the contrary, there are quite a few countries that want a strong dollar because it allows them to maintain a strong trade imbalance with the US. Japan is one.

http://story.news.yahoo.com/news?tmpl=story&cid=1471&ncid=1471&e=5&u=/ibd/20031008/bs_ibd_ibd/2003108feature

err. I think you missed the gist of my statement. while countries may favor slight differences in either direction, virtually no one in the global market wants a massive decline in the value of the USD (loss of global liquidity == doomsday scenario).

Depends on what you call massive, the dollar appreciated nearly 50% during the nineties, I wouldn't mind seeing at least half of that wiped out and probably more. That will bring jobs back to our shore.