Posted on 11/27/2004 10:24:13 AM PST by soccer_linux_mozilla
The United States’ trade deficit is soaring and the once high-flying dollar has sunk to record lows against Europe’s common currency.
The dollar’s record low against the euro coincided with the government’s report that the United States was running a trade deficit through September at annual rate of 592 billion dollars. That compares with last year’s record 496 dollars billion. As a result, the country is having to borrow almost 600 billion dollars from overseas this year to pay for the imported cars, televisions and other items Americans are buying.
Fortunately the U.S. is run by adults who don't base their domestic policies on your purchasing power in foreign nations.
Yes, your Dollars aren't going to buy as much foreign nonsense as in the past. For you, America's economic boom is probably an overall bad thing.
But for patriotic Americans, a lower Dollar will mean more modern U.S. jobs making future things and providing future services that were in the past cheaper in foreign nations.
To get to that point, however, the Dollar must fall further.
You can join Daschle in being deeply saddened as the Dollar does precisely that, too.
As the value of the dollar falls, imports become more expensive, so manufacturers will inevitably turn to cheaper domestic supplies.
Except the Chinese, who have the yen tied to the dollar, but that can't last or the Chinese will be able to export to the US only. They will have to adjust, and their exports to the US will drop as well.
Budget deficits are a worry, but the value of the dollar is also based of the health and stability of the US economy. Only the US and China are growing right now, but China is tied to the dollar anyway.
Therefore, a big crash is unlikely, but a cheaper dollar is good for the US in many ways.
Your cost of living in France is higher because the U.S. Dollar is not as overvalued recently as it has been for decades.
The dirty little secret is that for decades the U.S. permitted our Dollar to be overvalued in order to aid the economies of our recovering allies such as the UK, Germany, France, and Japan. The high Dollar let Americans purchase vastly more European goods than would have happened under purely free markets.
But those days are over. That stealth subsidy of exports to the U.S. is going away. The Dollar is not going to remain outrageously overvalued for much longer.
It's merely diplo-speak. No one of any consequence is foolish enough to think that it sounds weak to want a strong Dollar policy, and certainly the world is not foolish enough to think of GWB as weak.
And who said it did? Your reading skills are as poor as your debating skills. I am finished with you, you are waisting my time. It is very obvious to ANYONE that I am arguing that huge deficits BRING ABOUT collaspe not the opposite. jezzz, some people.
You do realize that the Dollar has dropped 30% in the past 2 years, and that it continues to drop (hence, this whole thread), yes?
And you do realize that as the Dollar continues its gradual decline that our trade deficit will fall towards parity, yes?!
Because if you grasp those two things...what are you claiming that the GOP is going to be blamed for, other than the resurgence of the American manufacturing and service sectors of our economy?!
At last you got something right, when the purchasing power of US workers is about the same as Chinesse workers "the system" will balance itself.
Now you tell me who is getting screwed by so called free trade. Free Trade is bankrupting the middle class, not something a patriot would approve of.
No, when the purchasing power of the Dollar multiplied by the Productivity of the average American worker matches the purchasing power of the Yuan multiplied by the Productivity of the average Chinese worker, *then* a free market system will approach parity (i.e. move towards balance).
This does *not* mean that Americans live at Chinese standards or that Chinese rise to American standards ... for the simple reason that the Productivity levels are different.
What are you claiming that the GOP is going to be blamed for?
Oh Boy, that is a great record to have going into the next election.
OK, you are corrent here. Still very bad news for working America.
Those two things are mutually exclusive. You can't have both at once. If the Dollar is worthless, then we can't buy *any* Chinese goods.
Of course, the Dollar isn't worthless; far from it, it is overvalued. That's why imports are so cheap.
But the further that the Dollar falls, the more expensive those imports become...thus making it easier for Americans to compete.
Throw me into that briar patch.
The Chinese yuan is linked to the dollar at a particularly low rate of 8.28 (I believe). When the dollar rises, it rises. And when the dollar declines, it declines. So the imports from China will remain cheap -- for the time being, anyway.
Good hard-to-find quotes. Thanks for posting them.
When all is said and done, we will begin the painful process of re-building our great country.
Great President THOMAS JEFFERSON warned us agains permanent alliances (e.g. WTO, FTAA, NAFTA etc.)
"Peace, commerce and honest friendship with all nations--entangling alliances with none, I deem [one of] the essential principles of our government, and consequently [one of] those which ought to shape its administration." --Thomas Jefferson: 1st Inaugural Address, 1801. ME 3:321
Are you that dense or are you just playing troll? For the third time, huge trade deficits bring about currency devaluations. Got that?
Now what happens to the average joe six pack when his dollars are devalued? Whom to do think average joe six pack is going to blame when his standard of living drops to third world level?
That's all well and good, but why shouldn't Bush get a pass on the Dot Com bubble, actually, it's crash, which happened in 2000, Clinton's last year in office?
Any Ideas?
"When patience has begotten false estimates of its motives, when wrongs are pressed because it is believed they will be borne, resistance becomes morality." --Thomas Jefferson to M. deStael, 1807. ME 11:282
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