ab.politics

"Roedy Green" <see_website@mindprod.com.invalid> wrote in message news:6m92m3dckngid531m5sv1i1gs99likub1i@4ax.com... > On Tue, 11 Dec 2007 23:11:01 GMT, "None" <noway@noway.com> wrote, > quoted or indirectly quoted someone who said : > >>The devaluation of the US dollar is intentional on the part of the US. The >>use of the Euro actually benifits the US. Driving up the value of the >>Euro >>means things like the Airbus will become more expensive relative to Boeing >>products. > > It benefits US manufacturers, but hurts the US generally because it > has a half a trillion a year trade deficit. All things they import > will appear more expensive to them. This will cause them to borrow > and inflate. This will lower the value of the dollar further in a > vicious spiral. Debatable unless their product is 100% domestic. If your into mining, your fuel and transprortation costs just went up sharply, want sough American bananas? Going to cost 30-35% more. Same goes for iron, coal, computer hardware, transportation and virtually anything foreign. As it works it way through the economy, it is inflationary. While prices go up, so does buyers resistance. > The nice thing about currency devaluation, is it tends to be > self-correcting. Expensive imports discourage importing. Cheap exports > encourage exporting. However, if a country has a heavy consumption > addiction they refuse to stop importing. They borrow, which makes > matters worse. This is true. If they import too much and print money to cover it, dilutes the economy and makes foreign anything more expensive. > There has a been a pick up in US exports, but not enough to > compensate. Takes awhile to move through the gears. > One other problem the US has is its massive agricultural exports are > all heavily subsidised. They lose money on every transaction, but try > to make it up in volume. Just like Canada. I suspect the loonie too is in for a tumble. Already started too.