Some would say that a falling dollar can fuel inflation. However, I would argue that the inflation we have experienced is, for the most part, not related to inputs. The typical American is experiencing inflation due to 1) rising price at the pump and 2) health insurance and, for those with a conscience 3) disappearance of defined benefit plans and 4) very high mortgage payments (because they locked in 2005+). #1 is really the only one that has a component related to the falling dollar. But even in the case of #1, the majority of the rise in oil is not due to the falling dollar but due to wide variety of factors. Again, the only thing that is going to save our sorry butts after the inept subprime/banking mess is exports. If we restrict that, I can almost guarantee you that India, China and several other countries will kick our tails for the next century or two. Our banks are the most pitiful, lame, sorry collection of corporations on planet earth. However, our exporters are world class. From aerospace to media to IT to biopharm: America is king. In many industries we've got the marines but we're treating them like they're a bunch of toothless security officers at an old warehouse. Time to unleash them...
American exporters don't need politicians to baby and pamper them. The politicians will only make things worse. That's their job: to completely screw up and the economy and make things worse for us for generations afterward. No, our exporters can handle themselves just fine thank you...
Absolutely. Inflation is easy to undertand... "Gummint deficit spending + Fed money pump (greater than the population growth) = INFLATION"! Whatever the politicos do/say to deny and mitigate the impact of "excessive money" are all LIES!!
I just realized there was second response to my post. OK I am gonna spell it. If Gnome says one reason USD is screwed because of high labor cost I say bullshit because Euro is expensive despite even higher labor cost in Europe. And I respond with sarcasm. It makes response shorter. I guess it's my fault.
Sorry, but I really think you're living in a non-existent world - a world from bygone days that can no longer be. There is no way to pretend that we don't have to compete globally. If we put tariffs on, other nations will put tariffs on us. And in the meantime the rest of the world will be signing free trade agreements and kicking our heinies. That's just the facts now. Right now Canada has an FTA with Columbia. But our politicians are doing the typical political grandstanding that will leave our country impotent if it continues. Seriously, even the conservative National Review thinks that we should get a free trade agreement with Columbia: http://article.nationalreview.com/?q=NTQyNGM4NDk4NGZkMmFkNmI2ZWQ4MjA5NDE3ZjY1Y2M=&w=MA==
WTF are we exporting? I think this is a farce. The exports are factory machinery that is being shipped over to China. CAT has 16 factories in China, so they produce the equipment they sell to China over there. Boeing is going to start manufacturing there also, and already has subcontractors on the 787 in China. Once all the equipment has been exported, the export numbers will plummet, imo. We are so screwed. We are going to be a half step up from Mexico.
Methinks you have the cart before the horse. My Webster's defines inflation as "a persistent substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (as opposed to deflation)". Rising prices do not cause inflation, inflation causes rising prices.