yeah, and at 15cents an hour, it took ALL DAY to make that dollar too... today you can eat dinner and goto a movie for less than one hours work/pay.
Posted on 04/21/2007 7:38:46 AM PDT by A. Pole
NEW YORK -- During the Great Depression, New York's ebullient mayor Fiorello LaGuardia dubbed the popular marble lions that frame the steps of the city's main library Patience and Fortitude -- a reference to the strengths residents would need to summon to survive the economic tumult.
Robert Brown, chief investment officer at Genworth Financial Asset Management, contends Americans will eventually need to call on those same attributes if the US dollar continues to fall as he and many other analysts expect.
[...]
While the economic shift would likely draw out some winners in the US economy, such as companies that sell goods and services overseas, it would also likely sharply reduce America's purchasing power and cause seismic shifts in some sectors of the economy.
[...]
The dollar's decline has taken place over a period of years, but more recent pullbacks have tested historical benchmarks. The dollar, which began to weaken broadly in early 2002, has fallen more than 50 percent from its October 2000 trading peak against the euro. It has recently come close to hitting its record low against the 13-nation currency and is near a 26-year low against the British pound.
[...]
Initially, the changes could appear mild, even pleasant. US companies that sell overseas can reap big gains when they make sales in a stronger currency and then translate that back to dollars. This past week, IBM said its first-quarter revenue rose 7 percent to $22 billion. However, without the benefit of converting foreign revenue to dollars, sales would have risen only 4 percent.
[...]
And of course a weaker dollar means travelers to the United States from places such as Europe would see "sale" signs everywhere they looked.
[...]
(Excerpt) Read more at boston.com ...
Well, which is it, A. Pole . . . Do we want a strong dollar and a high standard of living, or a weak dollar and a strong market for U.S. exporters?
Good post.
It's a W thing. Early in his presidency he said that while he believes in a strong dollar, he thought the market should set the value. That got interpreted as he wouldn't defend the dollar, and along with his spending spree, the dollar has been weakening ever since. It's a policy that's good for oil companies, because that's the one big import for which there is little alternative.
It’s got to be a great time for anyone in europe who wants to visit or vacation in the US - rent a Harley and hit the road!
In one of the strongest economic expansions in history, leave it to the Globe to spin a single statistic into dire news. The fact is: the Bush economy beats the Clinton economy hands down, in spite of the DBM attempts to spin it otherwise.
Most politicians are perfectly willing to destroy the rest of their economies in order to help exports. They must all have mercantilist tumors in their brains.
It’s also one of the biggest expansions of government spending in history. And for many people it’s led to big increases in the costs of housing, transportation and food.
As a matter of fact, the huge current account deficits do threaten our economy. Bush is not responsible, although things have gotten significantly worse under his watch; the Fed has been pumping up these distortions ever since FDR, if not earlier, and Greenspan produced a huge bubble under Clinton.
BUT, although the US economy is fragile, this article is a load of eyewash. The economies in many other parts of the world are in much worse danger. The dollar is currently bottoming out at support, around 81 cents, and is unlikely to drop below .80 at this time. The COT numbers reveal that the professionals expect a recovery, and are betting strongly on the dollar and against the Euro. Also against the Aussie and New Zealand currencies, for some reason.
For instance, the most recent COT report on the euro shows commercials long 22,960, short 158,914. That is a historical extreme, indicating that something is about to break prett soon. Commercials always bet on the right side, and speculators inevitably bet on the wrong side. The folks quoted in this article are betting with the speculators.
A dollar could buy dinner a movie and popcorn and candy.
Why haven’t the countries which have historically had currencies weaker than the US$ gone into major depressions? I am asking this seriously, as we have spent time in Australia and NZ and did not notice that they were in major depressions even when their currencies were only 40%-50% of ours.
I did notice that prices for gasoline and appliances were much higher than ours at those times, but people were working, appered healthy and the places we visited appeared vibrant.
As tourists, we loved the exchange rates.
We also visited places like Tahiti where the French tourists got a superior exchange rate over the Americans. The workers appeared exploited in the 70s and by the year 2000 they were obviously unhappy and sullen, even though the present economy appears to allow more access to consumer goods.
Also, when we have higher exports, doesn’t that mean that more people are working? While inflation is obvious over the past 15 years or so, our businesses are earning more, so we haven’t felt really pinched. Our manufactured product is selling in Europe, while back in the 80s, it didn’t,
It is just difficult to keep hearing about imminent Depression over the past 40-some years, yet we have never been without earned income and while we cannot afford everything we would want, life seems fairly good.
Dow 13,000
Unemployment 4.4
What about outsourcing?
At 42 rupees to the dollar, that 20-lakh programmer is costing $47,000, not counting overheads like office space and the saleman’s commission.
If it went down to, say 35, you’re talking $57,000. At this point, corporations might start rethinking their operating model.
The free trader in a mercantilist world is a sucker.
When all the loans are called in, what will we have of value to pay with?Our intellectual property is unprotectable, and thanks to the public schools we aren’t exactly the sharpest pencil set in the case.
Interesting that this would come out the very week the DJIA hits a new high following many highly satisfying quarterly reports of many major corporations.
I hear you had to work 4 hours to get one.
good point.
Inflation is a deadly enemy.
It’ll be good for manufacturing, especially manufacturing that does not depend too much on oil imports. Also good for domestic oil production. Not good for autos.
yeah, and at 15cents an hour, it took ALL DAY to make that dollar too... today you can eat dinner and goto a movie for less than one hours work/pay.
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