“I do not think relatively small movements of the dollar will have any impact on trade”
If foreign-produced goods become more expensive in America, isn’t that going to stimulate domestic manufacturing? The loss of manufacturing jobs here in America has been a tragedy of the last several decades.
This article by Andy Grove (founder of Intel) is sort of related to our topic:
Yes, but the higher cost of manufactured goods will bring down the purchasing power and standard of living of all Americans. So it’s no different than a general tax on the public and redistributing to a particular group of individuals.
The only real way is for American businesses to become more productive/efficient. For that to happen you have to first get rid of the Unions.
So for what it’s worth, I side with the Chinese more than I side with the AFL-CIO.
“If foreign-produced goods become more expensive in America, isn’t that going to stimulate domestic manufacturing? The loss of manufacturing jobs here in America has been a tragedy of the last several decades.”
Andy Grove is calling for a trade war. I do not want a trade war.
The idea that the currency is causing the trade imbalance is misguided. Currency may be a factor but only one factor. We have so many issues with competitiveness. The issues have gotten much worse with rat control. The rats are trying to give the unions much more power. The rats have passed many laws that increase production and employment costs. The rats have other proposed laws (such as the Equal Pay Act) that will be a yoke around employment and production in this country.
The currency will be changed regardless of action here. China wants to increase the value of its currency over time although perhaps not in the short term. We need to focus on our competitiveness issues.