The benefits of the dollars decline

[Cameron]

http://www.epinet.org/content.cfm/briefingpapers_bp140

Well worth the read to understand the falling dollar. The falling dollar actually creates jobs as it makes American products more cost competitive and reduces the trade deficit.

Also the Euro represents a small portion of our trade, and thus the falling dollar vs the rising euro is not particularly a problem.

[DawnGrace]

This article was written in 2003. So where is the rise in manufacturing jobs created by the falling dollar it contends it would cause to happen? Somehow on paper things can be made to look good, but in actual real life it doesn't turn out that way at all.

[Cameron]

We added 166,000 jobs in October of this year. The un-employment rate is 4.7%, a number any politican would love to have.

Yes the article I posted is dated, but it explains what happens when the dollar falls. Its not doom and gloom, its actually beneficial.

[Tammy]

These jobs that were added what is the wage they are getting. I bet it is minimum wage. You can't live on that today.

[Bernardd]

There are clearly benefits to a "drop" in the dollar's value, specifically the attraction to American goods from overseas markets. (It's interesting that no one discusses this.)

Everyone is up-in-arms over China and its economy, saying how it's booming and how they will destroy American financially. Newsflash! China itself has reduced the value of its own currency!! I'll say it again, China has reduced the value of its own currency.

At the first meeting in December, Mr. Paulson said he pressed China on several fronts, particularly on currency, which the United States maintains is being kept artificially low in relation to the dollar to expand Chinese exports and curb imports.

http://www.nytimes.com/2007/02/01/business/worldbusiness/01paulson.html?ex=1327986000&en=c814a4257b5e2940&ei=5088&partner=rssnyt&emc=rss

Yet where are the doom and gloom predictions about the Chinese Yuan? We hear it about the American dollar all day every day, yet not a peep about China's currency.

This is clearly a non-issue (the dollar's value that is). Yes, I agree there would come a point where it would be a disaster, but we're certainly no where close to that point yet.

This article was written in 2003. So where is the rise in manufacturing jobs created by the falling dollar it contends it would cause to happen? Somehow on paper things can be made to look good, but in actual real life it doesn't turn out that way at all.
Didn't he post a rise in jobs?

[Bernardd]

These jobs that were added what is the wage they are getting. I bet it is minimum wage. You can't live on that today.

You bet they're minimum wage?
I bet they're not.

[Issachar]

A falling dollar is simply other words to say inflation. Inflation destroys savings. If one has worked for say, 43 years and has been diligent about saving, that ...... let's say, with nothing but saving, $125,000.00 would not be worth near what it would be with no inflation.

The United States currently has an enormous trade deficit (importing more than it exports), which represents a significant drag on efforts to spur economic growth and create jobs, and has led to an accumulation of foreign debt that will have to be repaid in the future. Given this trade deficit, the benefits of greater international competitiveness prompted by the falling dollar greatly outweigh the costs. http://www.kitcocasey.com/kkcImages/1117564802-CurrentAccount.gif The US is importing $700B more in goods and services than it sells abroad. The shape of this change is not one of a cycle that gets pushed to one side and then swings back to the other. It is more like a cliff. Our situation is unprecedented. No G7 country has ever had as big a deficit. Axel Merk, who runs a foreign currency fund (www.merkinvesments.com) points out that the US CA deficit could reach $900B in 2006. He references the OECD for this estimate. To see if this is reasonable, I calculate what would happen if crude oil went to $100/ bbl. We import ¾ of our 20M bbl per day usage. That calculates to (20 X ¾ 365 =) 5 billion barrels per year. At $100/ bbl this bill would be $500B. All other cars, computers and clothes would be in addition. If the dollar's purchasing price dropped as the quantities of goods stayed the same, the deficit would also rise. A $900B deficit is possible.

The situation is even worse when looking not just at what happened each year, but at the accumulated deficit of the US. This accumulated deficit over time measures how big the US indebtedness has become. The chart below, which is even more dramatic, shows that we have accumulated a $4 trillion debt. http://www.kitcocasey.com/kkcImages/1117564805-CAAccum.gif More (http://www.kitcocasey.com/displayArticle.php?id=133)

I hope most, if not all of you, will read the "more".

Issachar

[Issachar]

Cameron and Bernardd, please know that at least I, appreciate your posts. I'd like to mention one thing though and I'm only speaking for myself. I notice that you two fairly often mention the "doom & gloom" scenerio vs. the more optimistic scenerio. I'd like to say, again, for myself, that I do not believe in scenerios such as d & g and optimistic. In my feeble mind, there is only what is true and what isn't. I want to know what is true. Being human, I'm certain that some of the views I hold are not accurate but some are. I believe that the Holy Spirit will lead me to see what is true where I am in error. What I call optimistic, is truth. If the truth happens to be "the sky is falling" (I don't believe that, but you get what I mean), then I'm optimistic in knowing that because it is truth (should that be the case). In other words, I do not sense "doom & gloom" when things are down in this world nor do I sense optimism when things are up in the world. We are separate from the "world" by virtue of being in Christ. It matters not to me personally if things are "up" or "down". My joy is in Christ, not circumstances. The "world's" 'joy' is in circumstances so therefore, the "world" constantly strives to put a pretty face on everything because if they see anything ugly, they get down in the dumps. Jesus is the Rock and does not change.

I hope this made some sort of sense.

Issachar

[Issachar]

A simple minded analogy:
I'm in my living room; reading. All is well. My neighbor is outside in his garden. It looks like a storm is brewing in the western sky. Eventually my neighbor sees a tornado in the vicinity. He would like to run and tell me to take cover but remembers that I only want to hear optimistic news. He takes cover. We both lose our houses to the storm. I lose my health along with mine. My neighbor brushes off the dust and climbs out of the hole that was his basement.

Alternatively, he warns me with a loud shout. I take heed and head for the basement storm shelter. The tornado dissipates and does nothing. Just some rain and a little wind. I climb out of the storm shelter upset that I have this stupid spider webbing in my face.

Issachar

[Cameron]

:wave Hey Issac....I hear ya.

You seem to have the right attitude. Things are what they are when they are and that's about it.

My beef with others is that any "negative" news is taken as a sign of a soon coming catostrophe. I read one post where someone was concerned about a few hundred dollars she had in savings and wondered if she should get it out. Just a few hundred dollars and they were panicking over this dollar decline.

As an older poster, I can tell you that what we are seeing with the dollar is not new. The dollar has fluctuated before. China intentionally keeps its currency low. And the Euro only represents a fraction of our trade within the world.

Drive by the Wal Mart parking lot the day after Thanksgiving and see how many people are worried about the dollar.

The dollar will likely rebound and then everyone will be scrambling to get back in. But if it doesn't, I have instructions from the greatest book ever written. It says to fear not. It says to not let your heart be troubled. It says the people of God have never been seen begging bread. It says our needs will be filled from His riches in glory.

The dollar may be falling, but the sky isn't.