it means europe is getting screwed
Last week it was global warming, then this week it was MRSA infections and other super bugs, now you are telling me it the weakening dollar.
Help...
It is not my turn to panic. It won’t be the next time either.
TRADE DEFICIT SHRINKING— WHY CAN’T BUSH MAKE IT BIGGER
A weaker dollar means less purchasing power for Americans with savings (in dollars) - especially middle or lower-middle-class Americans. True, there are “inflation-adjusted” things, such as T-bills, but they are far from sufficient to compensate for the real cost of living increase. It is in the interest of the government to understate the actual level of inflation, and therefore, to confiscate wealth from the unprepared or unwary, by making dollars more numerous and therefore less valuable.
The falling dollar is a pay cut for every American that has to buy imports. Which is pretty much every American. But let’s keep borrowing and borrowing.
Ping.
And what happens to the cost of oil and all the other raw resources that we import to make things?
The falling value of the dollar does NOT improve our standard of living. It makes every American poorer relative to the rest of the world.
‘All of the sudden it becomes cheaper to employ an American technician than one from Bangalore.’
Some hyperbole tonight I see.
Tell that to the Germans who lived prior to Hitler gaining power.
It took a bushel of money to buy a loaf of bread. It got so they let workers out of work at noon each day to spend their money to get that money back in the system.
The result? Hitler took power and the rest is history.
I shudder at the thought.
btt
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.
Only 17% of US companies are exporters. Something like 94% of exports are from just 4% of US companies. A weak dollar does negatively affect large sectors of the economy, the increased exports positively affects a very small percentage of the economy.
b
Now, for the other 83% of US businesses in this country, the falling dollar directly affects their bottom lines by increasing costs of commodities. Commodities traded on world markets where all currencies are fungible. And the US Dollar has increasingly bought less in a commodities market where 100% of supply will be bought and consumed even if US purchase and consumption of the commodities drops by 10%.
We can suffer a relatively mild recession here, and have to fight tooth and nail just to be able to regain current levels of consumption on the economic rebound.
There is plenty of mid term and long term bad news involved here.
It means Clemenza’s vacation in Spain next month is more expensive than it should be.
Oil is the life blood of the US economy. A substantial rise in the price of oil will result in substantial inflation. When oil is $100/barrel...and gas $4/gallon...this economy will depress 10-15%.
Yeah, bring it on.
Dollar falls far enough maybe the led based Chinese crap will become too expensive and we will start buying American again.
I guess we can start hiring more folks at home... and everything is in balance.
It is another powerful argument to Americans that to save $ is to be leaning over ready to get screwed by uncle sam.
Make a PROFIT!
Cash in, and sell those Yen to get even more dollars. :-)
I am still worried about the Spotted Owl.