[Lurkina.n.Learnin]

What is your view on the strong dollar. Overall I think it’ a plus but it does have some consequences.

[gleeaikin]

Lower gas prices make poor people who drive less poor. On the other hand they also make oil companies and related industries less rich. If you are an investor you should diversify and go long or short as makes sense.

[woodbutcher1963]

The major consequence in the lumber business is that the Loonie is 25% discount to the greenback. This makes it better for Canadian sawmills to sell their products here than anywhere else in the world. It has created an oversupply of lumber in the US and therefore prices are going lower. This is in spite of increased demand from the increase in housing starts. This is especially evident the closer you are freight wise to the Canadian border. The US port strike is also having an effect on the lumber market because it is almost impossible to ship anything going to Asia right now. So, supply goes up, prices go down.

[expat_panama]

Thanks for the heads-up!  It's looking like there are two issues here, one is how the dollar exchange rate interacts with U.S. corporate profits, and the other issue is why the Associated Press says the strong dollar is causing falling profits.  The first one's easy, we just look:

Not much interaction; in fact profits are up a lot while the dollar's up just a bit.  It's true that some corps get hurt when they can't sell products to foreigners but at the same time businesses that buy foreign raw materials for U.S. factories are helped.  America has a 'trade deficit'.  That means more are helped than hurt.  My guess as to why the AP is saying the dollar hurts profits is that they need to sell stories and this one's believable especially to the 'profits are down' crowd.  Big crowd.  The right wants to believe businesses are dying and the left wants businesses to die.  Those of us not allergic to good news are happy it's not true. 

Ah.  Also on AP's agenda is the idea that American economic problems are not because of taxes or regulations but because the U.S. dollar is stronger than ever.