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To: TChris

You and I live within a US dollar trade area called the United States of America. Look at your paper dollar bill and it says by law it must be accepted for all debts private and public. All our dealings are in US dollars and you have described a few of yours. You and I do not deal in yen or rubles

This is very different from foreign trade where US dollars trade against other currencies and rise and fall against them. The US dollar rises and falls due to trade deficits/surpluses and USA internal economic conditions such as the Fed currently “printing money” at a breakneck speed. What the Fed sets as interest rates also is a factor. Dittos for bond rates here

Australia raised its interest rates a few days ago and its currency soared against the USD. A case of the trade deficit/surplus not being a factor in currency fluctuation.


158 posted on 10/09/2009 8:14:10 AM PDT by dennisw (It's not called the Wheel. It's called the Carousel.)
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To: dennisw

Australia might not be the best example for you, seeing that it has a merchandise goods trade deficit with the U.S.


165 posted on 10/09/2009 7:02:43 PM PDT by 1rudeboy
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