Weak Dollar Policy Doesn't Work

Discussion in 'Economics' started by scriabinop23, Apr 11, 2008.

  1. I ask a simple question: Fine, you have more jobs via a stronger export sector. But how the hell is the export sector supposed to compete with input costs doing this?

    Hopefully, regulators get the message and put an end to this weak dollar policy. I'm sure the fed can dole out some long USD index futures as incentive.

    From WSJ Today.

    Import Prices Show Pervasive Jump,
    Even When Oil Costs Are Excluded
    April 11, 2008 8:56 a.m.

    WASHINGTON -- Import prices surged in March, lifted by not only oil but also the biggest jump in nonpetroleum costs on record, a worrisome sign for inflation.

    Overall import prices rose 2.8% last month, after increasing an unrevised 0.2% in February, the Labor Department said Friday. Wall Street expected import prices to climb 2.1% in March.

    During the 12 months since March 2007, prices increased 15%. Between March 2006 and March 2007, prices climbed by 2.8%.

    Petroleum import prices increased 9.1% last month and fell 1.9% in February; prices soared 60.0% in the 12 months since March 2007. Between March 2006 and March 2007, petroleum import prices climbed by 3.1%.

    Excluding petroleum, all other import prices rose 1.1% in March, after increasing 0.7% in February. Prices excluding petroleum increased 5.4% in the 12 months since March 2007, nearly double the 2.8% climb between March 2006 and March 2007.

    The 1.1% March increase in non-petroleum prices marked the largest one-month increase since the index was first published monthly in December 1988. Driving it was a 3.6% advance in prices for non-petroleum industrial supplies and materials; that advance was pushed mostly by prices for unfinished metals, but natural gas, finished metals and chemicals also rose.

    Prices for imported food, feeds and beverages rose 2.5%. Consumer goods climbed 0.5%. Autos rose 0.2%. Capital goods were unchanged.

    Import prices from China increased 0.7% in March. Prices for imports from Canada rose 3.2%. Import prices from the European Union advanced 1.6%. Japan inched up 0.1%.

    Export prices increased by 1.5% last month. Prices rose 7.9% in the 12 months since March 2007.

    Prices of agricultural exports increased 4.1% in March, and prices of non-agricultural exports rose by 1.2%.
  2. The three month annualized rate for Food prices imported is now +22.6% - a record. Ben Bernanke should be dragged through the street and shot.
  3. I was talking to my parents yesterday, and they told me 20 lbs rice cost $18 compare to $13 I paid 2 weeks ago.

    I just don't understand how could uncle Ben say a weak dollar doesn't affect most of us when the nation imported much of everything. The only thing we are doing great exporting is jobs.
  4. Please tell me that you are not that dumb.
    The Dollar has dropped 50% over the last 7 years that George Bush has been in office. And you want to drag Ben Bernanke through the streets because of the last 3 months?

    Bernanke does not set dollar policy.
    It's the Treasury Department and good old frat-boy "Dumbya".
  5. agreed. this is a structural event that has very little to do with the current state of the fed ... more to do with a house of cards poorly constructed over the last decade.
  6. Fine, tie Bush to Ben and drag them both through the streets.

    I'm not saying the dollar's decline and inflation's rise has nothing to do with what can only be described as an utter disaster of an administration. But I am saying that the dollar's decline, and commodities sky rocketing as a result have a direct relationship to decreasing federal funds rates - which Ben is ultimately responsible for.
  7. agreed also: not to nitpick but I think of the current 7 year decline as part of the decline
    that began in 1984
    Southamerica's (?) posts may be informative; the 'we support a strong dollar' is rubbish
    each declining cent reduces the US debt which is more relevant than rising prices
    not only is oil a $ based commodity but 'softs' and 'can you say potash' plus the other
    agro products used for growing

    Purchasing Power Parity - $ v *: http://fx.sauder.ubc.ca/PPP.html

    DX Cash chart: Moore Research Center, Inc: http://mrci.com/pdf/charts.php
    • dxc.pdf
      File size:
      24.8 KB