[HUG ] Re: The falling dollar/ photos vs digipics

At 02:21 AM 5/6/2008, JAMES WILLIAMS wrote:
The sagging of the US dollar is more political than economical, the US government likes our dollar worth less because then other countries will buy our goods. They are more concerned with making companies more money( you know the trickle down effect, lol). Hope I did not push anyones buttons, but sometime the truth hurts lol. But the real question is what is the truth? lol
That is hardly "truth": it is wild lunacy. The US government does not control the value of the dollar in international trade; that is set by the free market.
The dollar has recently fallen for a number of reasons. One primary cause is the insistence of the oil market to continue to peg the price of crude oil in US dollars: as the Chinese demand for oil has gone up, this has pressured the dollar to decline in value relative to the Chinese Yuan and, then, to the British Pound and to the Euro. There are other causes, but they are of a like nature. The feeding frenzy of our government (Republican and Democrat Parties alike) has not helped, nor have the costs of the Wars in South-East Asia.
In the short run, the cheap dollar will benefit the US. Our goods will cost less overseas and we will have to pay more for imports. That will help to adjust the balance of trade problem we have had since the days of Lyndon Johnson. In the long run, the dollar will rebound. I hope that this will not be for some years but most economists figure that it will happen within 24 months. In the end, though, the dollar will be up and gas and food prices will fall.
I am 58 and have been through cycles like this before and will do so again if I live long enough. Truly, there is nothing new under the Sun: the British were horrified by a similar situation in the 1790's, though they did not then have to deal with petroleum imports! 

Marc



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Cha robh bàs fir gun ghràs fir!


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