Replies

One other thing, mate.

In terms of trading, there IS NO MONEY, ANY MORE: CURRENCIES AREN'T MONEY, in the sense of the classical economic definition (medium of exchange, storehouse of value, unit of account). Currencies are these days exactly just like soybeans or copper or orange juice; they are commodities. That, and no more...and they should be traded accordingly.

Naturally enough, currencies aren't necessarily affected by the same factors as affect cocoa or wheat or silver, and a good thing, too. Weather (said he, naming only one factor) changes day-to-day and week-to-week; gov't policies and broad macroeconomic situations do not.

Not trying to be obscure here, at all -- just don't know what information might be most useful to you. (sorry!)

That's a trading perspective (which helps), but what I think we're trying to understand is a more macro economic perspective.

For instance, right now the dollar is the weak currency-- what that means for U.S. consumers is imports become more expensive while U.S. goods become competitively priced, for U.S. producers is export sales go up along with domestic sales. So this would tend, in time, to create stronger U.S. business profits, more U.S. jobs, smaller trade deficits, and an improving economy overall. The short-term pain to the U.S. consumer should be offset by the improving economy overall. Right?

Meanwhile, the Euro is the strong currency, and since they're already having economic problems, they're really going to suffer, and there's not a whole lot they can do about it.

Anyway, I don't know to what extent these currency fluctuations are orchestrated by central banks and to what extent they're purely market phenomena, but years of observation leads me to believe that imbalances work themselves out over time.

Sorry; I was unclear in my question (although I appreciate the answers, of course). I'm not into trading currencies. What I mean to ask is, is it generally a good thing for the U.S. economy for the dollar to be strong, or a bad thing? Or is that a variable, too? Or are they totally unrelated?

Thanks again for your patience with someone who really doesn't understand all this monetary stuff at all.