Posted on 10/25/2007 8:12:27 PM PDT by Philistone
To read the MSM headlines (which I try not to) the falling dollar is the end of the world. Maybe Wall Street should get a Noble Prize for their work in "Global Dollar Cooling". But seriously, what are the effects of a weak dollar?
1) Increased exports. Last month's exports were among the highest on record. Trade deficit? What trade deficit? Boeing, Caterpiller, Microsoft, Apple, etc. all with surges in foreign export sales.
2) Outsourcing? What outsourcing? All of the sudden it becomes cheaper to employ an American technician than one from Bangalore.
3) Cost of living? (I love this part!) Since China has pegged the Yuan to the Dollar, everything we get from China costs exactly the same! Maybe this will convince them to unlink the Yuan. Then we'll REALLY see who's the best producer.
4) Buhh... buhh... buhh... but foreigners will stop buying American Treasuries! What? In order to buy Russian ones? Chinese ones? Venezualian ones? Give me a break.
A weak Dollar equals: more exports, more jobs, more tourists (spending money) and the same or higher standard of living.
Bring it on!
...and don’t recruit illegals when assembling your Max Max style gang to pillage.
I can truely appreciate that!!! I’ve never done that either, at least twice (fingers crossed) :)
Gold isn’t money. At least, apart from all those banks who keep it locked up underground in vaults ;)
Money is an abstraction. Many things have been used as money over the years, including sea-shells and large stones, tobacco, colored beads, ornately engraved pieces of paper, and more recently electronic bits and bytes.
What I would like to understand, what is the benefit, if any, of differently valued and fluctuating currencies?
Thanks for the informative post & chart.
“What I would like to understand, what is the benefit, if any, of differently valued and fluctuating currencies?”
I’m no economist, but I did get kicked out of a Ramada Inn some years ago. I would say that there is no “benefit”. The different and fluctuating currencies are due to trade with currencies, obviously other than your own. Each state/country currency is unique and has to have it’s own value established initially just to work within it’s own intrinsic markets. Once they go outside, you see the different value and fluctuation come into play.
Hope that makes sense. Again, there is no benefit per se’, but it allows for trade amoung different currencies.
Hoping an accountant of some flavor can give a response here...
ping for possible answer
Beat me to it. It’s like asking: “What’s the value of every country having its own measurement system?”
Just an historical artifact.
“What I would like to understand, what is the benefit, if any, of differently valued and fluctuating currencies?”
Now for my REAL answer :) There IS NO benefit. Going away from precious medals allowed us to be screwed over with this fun thing called inflation. Ok, there...I said it ;)
So I was somewhere in the ballpark...good, yea!
Cheers!
Yes, but statute != Constitution.
Cheers!
If you don't post stupid comments, maybe I won't notice you. Seriously.
Well get used to it there whiz-bang, I’ve taken a new interest in the topic of trade :) Do you frequent the crevo threads?
And you were doing so WELL up to that point!
Amazing that even hard core capitalists get caught up in Marx’s analysis of gold. Understandable. Even Ayn Rand got it wrong.
I may have to start a new thread about this!
More like 60%.
Please clarify your point.
Falling dollars sure does hurt those of us who must labor abroad on U.S. Dollars, at least in the short term. The consolation we keep trying to imagine is that it should help stabilize prices here, as imports into China should be cheaper. We’ll see whether it does. Fat chance(!) that prices here would come down enough to compensate, but perhaps they won’t rise so quickly.
Actually, I don’t think the Chinese RMB can sink below the value of the Hong Kong Dollar, can it(?), because the HKD is pegged to the U.S. Dollar itself. The RMB and the HKD are at parity right now.
The length of the discussion threads, for one ;-)
Also, you don't have people playing the currency exchanges under a fixed exchange rate; and, presumably, the money supply grows more slowly under a gold system.
Now, a question for all of you. Back in the days of yesteryear, what was the supposed allure of bimetallism?
Cheers!
All I ever wanted was 3 gumballs for a dollar! (LOL) I do not like inflation! I also do not like the paper/coin currency system that allows for inflation. You must admit when a dollar was a dollar in gold. It would have got me 3 gumballs, anytime, anywhere. :)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.