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To: familyop

There is no necessary reason for the dollar to drop if manufacturing declines. Exchange ratios are determined, in the long run, by supply and demand of the various currencies.

Agricultural products are a huge export for the US and increases in that sector could outweigh the decrease in manufactured products.

In addition, manufacturing declines could, perversely, lead to the strengthening of the dollar because they would mean a slowing economy which reduces demand for foreign exchange strengthening the dollar.


6 posted on 10/04/2012 8:11:04 PM PDT by arrogantsob (The Disaster MUST Go. Sarah herself supports Romney.)
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To: arrogantsob

We need to produce things in America.

In America. In America. In America.

Period.


7 posted on 10/04/2012 8:13:34 PM PDT by Cringing Negativism Network (America doesn't need any new laws. America needs freedom!)
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To: arrogantsob
"There is no necessary reason for the dollar to drop if manufacturing declines."

Nations increasing production will see product price increases (price inflation). Our nation will also pay more for those products (price inflation). Nations with manufacturing production increases will also use more oil, increasing oil prices. Applies to other commodities as well (more dollar inflation).

"Exchange ratios are determined, in the long run, by supply and demand of the various currencies."

We see how the Ponzi schemes and our debt regime are working out with so many dollars around the world. Countries that produce too little while outlawing domestic competition (requiring big government at all levels to protect importers from domestic competition) quickly become poor nations or debtor nations (which suddenly become even poorer a little later).

"Agricultural products are a huge export for the US and increases in that sector could outweigh the decrease in manufactured products."

We already know what an agricultural economy with inadequate manufacturing looks like.

"In addition, manufacturing declines could, perversely, lead to the strengthening of the dollar because they would mean a slowing economy which reduces demand for foreign exchange strengthening the dollar."

As the USA gets poorer, more dollars will be required to buy foreign products. Such business is already slowing down. In the scenario you present, foreign exchange would slow much more here than between other countries. Mexico didn't exchange with other nations during the '60s, but more productive pairs of nations did exchange much between each other.

He who produces and has a wide array of useful things is rich. He who has only piles of worthless paper can't fool the rich one for long. We've seen over three decades of treachery from domestic enemies collaborating against us with foreign communist/fascist enemies.


17 posted on 10/04/2012 11:48:51 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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