Quote:
Originally posted by sperbonzo
Another economics genius.
The US treasury is HAPPY that the dollar is temporarily weak. The Banks in the EU are DESPERATE to get the Euro down, (I was at dinner with 2 VERY high level bankers in Munich in May).
Reason? The weak dollar is greatly helping US exports, as well as attracting foreign business investments. The strong Euro is KILLING EU exports, as well as sending world business investment into other markets, resulting in unemployment levels that average TWICE what they are in the US.
In the long term, the US dollar will need to come up in order to balance trade prices for foreign goods that the US MUST have, but in the short term it is one of the reasons why our economy is rebounding so fast from the post dot-com boom, combined with the trillions lost in Sept 11th.
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it's not quite as simple as that, what about the foreign investment that sustains your budget defecit? if they're not getting a decent return on their investment, then what happens?
what about the potential for significant rises in US inflation
and don't forget that trade is a two way street, if a weak dollar affects exports from the rest of the world to the US (and hence affects their ecconomies), that has a relative impact on imports to other countries from the US.
and don't forget many US companies need imports of materials etc to produce whatever products they make, if they're paying significantly more for those imports it makes them uncompetitive.