Exactly, a cheap dollar means our exports are now less expensive to purchase.
It does seem strange to see the Dollar worth less money then the Canadian Dollar though.
“It does seem strange to see the Dollar worth less money then the Canadian Dollar though.”
Not really, I’ve liven here in the USA since March of 2000... the US dollar has been eroding for a while now...
Just glad I paid off our Canadian Student loans last year, otherwise I’d been in deep poop now!
Doesn’t common sense tell us it’s not quite that simple? If it was, why has Bush promoted the so-called strong dollar policy? Why don’t we just push the dollar down another 50%? The answer is that while what you say is true, there are also negatives to a falling dollar. For example, China & Japan have about $2 trillion of USD denominated reserves, held mainly in US Treasuries. Do we really think they are going to sit there and watch the real value of their holdings decline w/o taking any kind of action? As they diversify out of USDs, what do you think will happen to interest rates? What’s to stop a downward spiral where diversification out of the USD pushes the USD down further causeing further diversification out of the dollar?