The dollar is doing terrible

[○∙◄☻¥tπ[╪AV┼cVê└]

The numbers of dollars per Euro has increased 50% in the last 3 years. Here's a chart.

This is probably caused by our massive deficits. We're going to have higher and higher interest rates, and maybe eventually people in foreign countries will stop lending us money.

[Richard]

A weaker dollar is a great thing for the United States, a bad thing for the rest of the world.  I don't know why you're bitching, unless you care more for the rest of the world than for your own people.

[○∙◄☻¥tπ[╪AV┼cVê└]

A weaker dollar is a great thing for the United States, a bad thing for the rest of the world.  I don't know why you're bitching, unless you care more for the rest of the world than for your own people.

There's more to the story than that. A weak dollar will lead to reduced foreign investment and lending to the US, which will hurt the economy and lead to higher interest rates, costing taxpayers even more.

That could lead to recession in the US.

[Moooooo]

So in other words... The short term effects of a weak dollar are positive, but the long term effect are extremley negative???

[○∙◄☻¥tπ[╪AV┼cVê└]

So in other words... The short term effects of a weak dollar are positive, but the long term effect are extremley negative???

If we weren't running massive deficits, we probably wouldn't have this problem, and it might not matter, even if we had it.

[Richard]

There's more to the story than that. A weak dollar will lead to reduced foreign investment and lending to the US, which will hurt the economy and lead to higher interest rates, costing taxpayers even more.

Except that it isn't...  The trade deficit indicates people are now more anxious than ever before to get their money into the United STates.

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Bwhahahaha.  How?  Europe is close to recession because of a STRONG currency.  You guys are rolling in the money now due to huge boosts in exports!  So you guys are buying less foreign products and taking less vacations in Europe.  Big deal.

You're doing fine.  It would be even better for you guys if the dollar dropped some more, say, to one Euro being $1.50.  Of course, it will hurt Canada and I'd be mildly annoyed.

[The Duke]

The deficit is not an inadvertent cause, jfern.  We have a deliberate policy of reducing the value fo the dollar to improve exports.

[TexasPatriot2024]

The deficit is not an inadvertent cause, jfern.  We have a deliberate policy of reducing the value fo the dollar to improve exports.

YES! thank you John, at least someone understands economic policies. The government controls the values of the dollar through production and distribution. A lower value stimulates foreign intrest in buying goods in the theory that they get a better deal, but they buy in volume, increasing our profits. Its a delicate system. My uncle is an economics professor at Baylor i have had this argument a few times. 

[○∙◄☻¥tπ[╪AV┼cVê└]

The deficit is not an inadvertent cause, jfern.  We have a deliberate policy of reducing the value fo the dollar to improve exports.

YES! thank you John, at least someone understands economic policies. The government controls the values of the dollar through production and distribution. A lower value stimulates foreign intrest in buying goods in the theory that they get a better deal, but they buy in volume, increasing our profits. Its a delicate system. My uncle is an economics professor at Baylor i have had this argument a few times. 

I know that, but there's more to it than that.

[opebo]

Correct, jfern, the US is in steep decline relative to the rest of the world - particularly Europe.  Our standard of living is far lower than it was when Bush took office, and by 2008, will be about 1/2 of what it was then.

[bullmoose88]

The only possible problem I see is that a weaker dollar means that when foreign nations buy US-T bills, they get a lower real return...meaning they're less likely to fund our debt.

I'm all for a weaker dollar in most cases, that gives me pause though.

[KEmperor]

The only possible problem I see is that a weaker dollar means that when foreign nations buy US-T bills, they get a lower real return...meaning they're less likely to fund our debt.

Well, it means we will have to raise the interest rates on the T-Bills.  Interest rates need to go up anyway though, they are very low right now.

[Jake]

Correct, jfern, the US is in steep decline relative to the rest of the world - particularly Europe.  Our standard of living is far lower than it was when Bush took office, and by 2008, will be about 1/2 of what it was then.

you say "our" like you actually live here.

[A18]

Opedophile does not understand the most basic economic concepts.

[opebo]

Opebo does not understand the most basic economic concepts.

I understand that if I make $30,000/year at .81 dollars to the Euro, and then two years later I make $30,000/year at 1.23 dollars to the Euro, I'm a lot poorer.

[A18]

That is the dumbest thing I've read in my life. If you actually believe that, you're a ing idiot.

[opebo]

That is the dumbest thing I've read in my life. If you actually believe that, you're a g idiot.

Just try clawing your way out of the deepening pit of devaluation that is the USA, and you'll find how how real my complaint is.  In 2000 you could waltz out and hold  your head up high anywhere in the world.  Now you're a second class citizen to holders of the Almighty Euro.

[PBrunsel]

Correct, jfern, the US is in steep decline relative to the rest of the world - particularly Europe.  Our standard of living is far lower than it was when Bush took office, and by 2008, will be about 1/2 of what it was then.

You must just love being anti-American.

[opebo]

Correct, jfern, the US is in steep decline relative to the rest of the world - particularly Europe.  Our standard of living is far lower than it was when Bush took office, and by 2008, will be about 1/2 of what it was then.

You must just love being anti-American.

No, it is horrible.  I am living on the same stipend at a lower exchange rate (Thai baht was about 43/$ when I first came here, now it is 38/$), and my inheritance is trapped in US dollars!  Mom and Dad haven't a clue about exchange rates - they don't go 30 miles away from the house, much less to another country.

[PBrunsel]

Correct, jfern, the US is in steep decline relative to the rest of the world - particularly Europe.  Our standard of living is far lower than it was when Bush took office, and by 2008, will be about 1/2 of what it was then.

You must just love being anti-American.

No, it is horrible.  I am living on the same stipend at a lower exchange rate (Thai baht was about 43/$ when I first came here, now it is 38/$), and my inheritance is trapped in US dollars!  Mom and Dad haven't a clue about exchange rates - they don't go 30 miles away from the house, much less to another country.

There was atime back in the 1980's when the dollar was losing much value, but it shot back up. I feel it is wrong to think that things will get worse.

[bullmoose88]

The only possible problem I see is that a weaker dollar means that when foreign nations buy US-T bills, they get a lower real return...meaning they're less likely to fund our debt.

Well, it means we will have to raise the interest rates on the T-Bills.  Interest rates need to go up anyway though, they are very low right now.

Are you sure you want to raise interest rates?

Contractionary Monetary Policy doesn't normally boost growth.

[KEmperor]

The only possible problem I see is that a weaker dollar means that when foreign nations buy US-T bills, they get a lower real return...meaning they're less likely to fund our debt.

Well, it means we will have to raise the interest rates on the T-Bills.  Interest rates need to go up anyway though, they are very low right now.

Are you sure you want to raise interest rates?

Contractionary Monetary Policy doesn't normally boost growth.

The economy is growing at a good rate.  And interest rates need to rise to at least a reasonable level, they are frightfully low right now, it cannot stay this way indefinately without risking inflation problems. 

[Richard]

Opebo does not understand the most basic economic concepts.

I understand that if I make $30,000/year at .81 dollars to the Euro, and then two years later I make $30,000/year at 1.23 dollars to the Euro, I'm a lot poorer.

Now measure yourself against, say, the Yuan.  You'll see you are um ... the same.

[Erc]

Opebo does not understand the most basic economic concepts.

I understand that if I make $30,000/year at .81 dollars to the Euro, and then two years later I make $30,000/year at 1.23 dollars to the Euro, I'm a lot poorer.

In Europe...

Again, sad as it is, 2/3 of the country (if not more) doesn't have a passport, so it really doesn't matter to most of them.  As long as prices aren't going up at home, it doesn't really matter, and it's actually good for the economy.

Although in the long run, it's probably not such a good idea, I would think.