Geithner Says Strong Dollar ‘Very Important’ to U.S.

spoken like a 3rd world finance minister

 

The main error people are making is that a low US dollar value is good for the economy. It should be very clear that it is not the value of the dollar that matters, but the direction. A DECLINING dollar is what makes things look good. It's not like we will reach a certain level and start partying and growing GDP. The dollar needs to decline continuously for this to happen. It obviously can't go to zero so this course is UNSUSTAINABLE and will make things a million times worse in the future.

 

economics 101 rings a bell? if the dollar falls in value the foreign countries (rest of world) will see domestic (us) stuff cheaper, hence they will import more.
for the us that means more production, exportations, jobs and foreign profits (foreign revenues rise when measured in dollars). it's great to devalue your currency.
the problem is when you devalue your currency every import will look more expensive. also, you can sell your stuff to foreigners so you will ask for a higher price at home, leading to inflation

 

This is a good program. Been listening since 2002 and their day has arrived finally.

 

Low USD will bring some exporters to life while killing off some importers. Not to mention easing the wild debt payments to China.

 

Indeed.

I can see how many Americans like having a high USD value so they can enjoy cheap Caribbean vacations etc, but a lower USD is not the end of the world for the USA. For countries exporting to the US however............

 

It will only ease debt payments to China UNTIL we need to borrow more money from them...and then the interest rate will sky rocket. If Republicrats and Demicans could learn the term "fiscal responsibility" then we may benefit (for a while) with a devaluing dollar. I don't anticipate that our "two-party" fraud system will move towards financial responsibility anytime soon - it would CRUSH the standard of living in America. ( I have written on other posts that we should tax imports based upon standard of living of the country that we are importing from. That way our workers wouldn't have to compete with workers just looking to eat . We would avoid watching our standard of living spiraling down.) ( I am not a free-market person - I believe in whatever system will best support American workers.)

-gastropod

 

So why are all exporting nations stock markets soaring despite having skyrocketing currencies vs the USD?

 

Agreed on the above points. The key is for fiscal responsiblity going forward.

 

Other countries are injecting liquidity as well, just not to the extreme as the USA is doing. Believe me, I live in Canada and our exporters are getting crushed right now with a low USD.