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

At 01:36 AM 5/6/2008, you wrote:

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.
Not entirely so. The Administration has let the market to do it's worst, but there was much it could have done to bolster the value of the dollar. Like better control of interest rates, paying for the expenses of Mr. Bush's war by increasing taxes instead of resorting to borrowing, slowing down import of oil, and other devices best explained by an economist.
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.
You have the basic idea. But each of the items you mentioned, with the exception, perhaps, of Chinese behavior, is subject to influence by Administration practices. (Oh yes, the Bushies among us will share the blame with the Congress, forgetting that the veto power is in the White House. A fuller explanation is available, off line, to Subjects of the Queen, and folk from Parliamentary nations.)
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.
John Maynard Keynes said, with irrefutable accuracy, that "In the long run we are all dead." In the short run, foreigners touring the US are finding great bargains.
Those of our members who point out that the world has far more pressing problems that the success of H are quite correct and to be honored for their humanity. Alas, we can not even keep a small camera company alive - how ever do we control genocide, aggressive war and greedy gas gobbling SUV owners. 

...........................B.F..........................

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