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jeff2178Jun 7, 2011
Don't trust the Chinese...
monvalleyJun 8, 2011
Well, obama sold us to the Chinese, so I guess they can control the dollar.
barackalypseJun 7, 2011
Actually, its hurt by sustained US deficit spending, this article is just about China's response to that fact.
jhw539Jun 7, 2011
Good. A lower dollar helps our exports. Expect to see more Boeing jets sold - they've just been put on sale versus Airbus. And more manufacturing locating here instead of Europe for the cheap labor in a stable nation (for example, IKEA has opened a factory here to cut labor costs on some of their shelving products) and friendly business policies (look at our REAL corporate tax rate and the lack of things like 5 weeks of mandatory paid vacation per year, or months of fully paid maternity AND paternity leave).
The dollar dropping while our cost of financing is staying constant is an unmitigated economic good for America. If Greece or Ireland could pull off that trick, they would not be on the verge of default.Comment is buried, click here to see the rest.
duncan202Jun 7, 2011
I find your optimism refreshing.
barackalypseJun 7, 2011
I find his optimism uninformed. A weakened dollar destroys the value of all savings denominated in US dollars and it raises the costs of imports (like oil), which for a net importing nation leases us worse off.
elipabstJun 7, 2011
Your points aren't mutually exclusive. A weak dollar makes our products cheaper thereby increasing exports, while foreign imports become more expensive. Basic economics.
bille3Jun 10, 2011
Our exports are minor compared to our imports so there is not enough net effect of selling products compared to buying products for higher prices. Besides our products here have been rising in prices due to inflation and shortages so the amount of offset by a declining dollar does not make up the difference.
We used to be an export nation and more immune to devaluation. Now we are an import nation.
barackalypseJun 7, 2011
Except you forget a lower dollar increases the amount we have to pay on our imports as well, and since we are still a net importer, the weaker dollar leaves us worse off.
"Trade Deficit in U.S. Widened in March on Oil Imports. Crude oil costs that surged above $100 a barrel for the first time in more than a year and a 9.4 percent drop in the dollar will probably keep driving up the cost of imports."
http://www.bloomberg.com/news/2011-05-11/trade-deficit-in-u-s-widens-more-than-estimated-on-surge-in-oil-imports.html
rexfelislocJun 7, 2011
Don't buy imports.
barackalypseJun 7, 2011
Which gas station sells domestic petroleum? Also, if domestic products cost more, buying domestic will further weaken consumer consumption power.
bionicpimpJun 7, 2011
That would be Arco. They get a chunk of their petroleum from alaska...although in reality, all gas stations do to a varying degree. Most gas stations will buy from all sources, including arco, then add their brand name additives at the last second. There isn't really any material differences from one gas station to the next.
landoltjpJun 7, 2011
I agree that the US is a net importer. One possible point of view is that the conditions will tip the US away from importing in favour of domestically manufactured products. As a Canadian, I'm all for it, and I would hope we follow suit.
barackalypseJun 7, 2011
It won't for a long time, its still cheaper in China and if that ever stops being true it will still be cheaper in Mexico or Malaysia.
floorboardJun 7, 2011
Also: the Chinese peg their currency to a percentage of the US dollar. They will ALWAYS be cheaper.
akronJun 7, 2011
So who's gonna buy US bonds to pay for the deficit if people think they'll lose money? When nobody buys bonds and the government prints even MORE money, then what will happen? Will you wake up when bread is $100 a loaf? Probably not.
floorboardJun 7, 2011
Nope. They'll just blame the evil rich for not paying enough taxes, rather than the gargantuan spending of the government.
bille3Jun 10, 2011
The FED buys the bonds instead of the investors.
cantstopwontstopJun 7, 2011
lower dollar value = less jobs or less buying power. in an economy of high inflation and unemployment, it is not a good thing at all. all it means is people pay less for our exports, which means less money gained. less money gained means less jobs or pay. the benefit only goes to those buying US exports.
if they can buy 2 boeings for the price of one, more sales aren't going to mean much. that means you have to sell twice as much as you normally do, for the same profit. how is that good? it's not, because business's main goals are self-profit, not paying employee's their fair share. most employee's generate far more in profit, than they get in compensation. so less profit doesn't really affect the wealthy as much as it affects the workers since they can easily offset the loss of profit with higher prices or a smaller work force. right now, the rich are taking all they can for themselves, and only themselves.
as said before, it also affects the things we import, and america imports far more than it exports.
bille3Jun 10, 2011
So if they continue to spend dollars buying up physical gold, they will eventually be able to back the Yuan with gold. Then they can make a play to have the dollar dropped as the reserve currency and the Yuan replace it.