Quote:
Originally posted by rockdude
I understand why those not in the US getting paid in dollars are feeling the pain of a weak dollar.
But what is the danger to the United States' economy with the weaker dollar? I know there are some, but I can't think of any.
Some Positives I see are:
-US stock market becomes more attractive to overseas money
-Exports go up/imports go down
-Interest rates are low, which will push expansion
Negatives?
Thanks.
|
US stock market is unattractive to foreign investors. Yes the dow, nasdaq etc have gone up, but if you adjust for the depreciation of the USD the market has shown anaemic growth.
Imports are actually going up faster than exports, because the US is further ahead in the economic recovery phase. Foreigners are still feeling the hurt, intensified by the USD fall, so they're not buying USD goods.
Interest rates are low, but the money supply M2, M3 is actually srhinking, what does this mean? people aren't borrowing money, even though the Government is giving it away
One negative from US perspective is that foreigners will more likely buy US tangible assets like property, or maybe takeover some corporations.