Teh American dollar...

[TuckEverlasting]

...sux these days! What is going on down there? How come the dollar is so low? :nsm:

Source (http://ca.news.yahoo.com/s/capress/world_markets)

The Canadian dollar moved up 0.33 of a cent to 92.12 cents US after running ahead just over three-quarters of a U.S. cent Friday, its best showing since October 1977.

There's never been a better time for Canadizzles to buy on eBay, that's for sure!!

[Jimmy Higgins]

...sux these days! What is going on down there? How come the dollar is so low? :nsm:To artificially help the trade deficit. Bush really is steering this country into an iceberg.

[TuckEverlasting]

To artificially help the trade deficit. Bush really is steering this country into an iceberg.

Do you mean you think the Powers That Be are keeping the dollar low so foreigners will buy more American goods?

I'm serious, BTW; this isn't a joke thread... I'm interested in this.

[Timothy Leary]

...sux these days! What is going on down there? How come the dollar is so low? :nsm:

Source (http://ca.news.yahoo.com/s/capress/world_markets)

The Canadian dollar moved up 0.33 of a cent to 92.12 cents US after running ahead just over three-quarters of a U.S. cent Friday, its best showing since October 1977.

There's never been a better time for Canadizzles to buy on eBay, that's for sure!!
It's called the fiat system. It's the worst thing we ever did to our money supply, and it's been on a never-ending inflation ride since.

[Jimmy Higgins]

Do you mean you think the Powers That Be are keeping the dollar low so foreigners will buy more American goods?

I'm serious, BTW; this isn't a joke thread... I'm interested in this.That's about the story. The lower the US dollar is, the cheaper US goods are for other nations to buy. Oddly enough, it has hurt Canadian interests because it has made their costs relatively increase.

[Ryokan]

See, now I am just the contrarian here. I think the dollar has been held too high for years and that the fiat money system is vital.

[aardvarkcore]

Would suck for Canadian exporters. The same thing is happening in New Zealand at the moment, it is causing major problems for exporters but the dairy industry is loving it.

[A-Man]

I'm gonna go punch Nixon in the nose. Let's go back to the Gold standard.

[Teallaura]

See, now I am just the contrarian here. I think the dollar has been held too high for years and that the fiat money system is vital.Would you explain that in a bit more detail for the economics impaired?

[Timothy Leary]

I guess you like your money losing 98% of its value, eh?
I personally like to retain the value of my earnings.

See, now I am just the contrarian here. I think the dollar has been held too high for years and that the fiat money system is vital.

[Tickle Me Mercury]

See, now I am just the contrarian here. I think the dollar has been held too high for years and that the fiat money system is vital.

If I recall, Milton Friedman felt similarly. It was one of the major points of contention with the Rothbard and the Austrians.

[Ryokan]

I guess you like your money losing 98% of its value, eh? I don't care. I care about my personal purchasing power. The number of real dollars I have matters. The value of my nominal dollars doesn't mean a whit to me, except when I want to sound old and talk about how "These here candy bars used to be only 30 cents when I was a lad." I personally like to retain the value of my earnings.
THen, you know, invest it or spend it. As long as you don't tape it to the back of your toilet your golden.

[Ryokan]

Would you explain that in a bit more detail for the economics impaired?

Sure.

Gold standard equals bad because= Gold tends to go up in value as time goes buy, at least in general. THat means the economy faces constant deflationary pressure when their is a gold standard that the government can't mess with. Deflation is the opposite of inflation, and is nasty because it adds a hidden cost to debtors and generally slows growth if its too fast. The government, of course, can periodically revalue the dollar to an amount of gold by fiat or by simply by not valuing it at 100%. But this defeats the entire point of the gold standard, which is to protect the currency from government meddling. Fiat money is really money based on people confidence in the strength of the economy. The government can openly meddle. Truth is, governments are wont to meddle, and will find a way no matter what. The advantage here is their meddling is based on reason estimates of economic conditions, rather than partly economic conditions and partly the vagaries of a commodities market. So, if you don't have a 100% specie standard you have a fiat based system, and 100% standards are bad because of qualities of the gold market.
As far as the dollar being too strong, well, look at the trade deficit. We are favoring consumers and importers over native factories and workers for little gain. The long term fiscal health of the economy, (not to mentioning helping out manufacturing workers who in this case actually ARE getting screwed by outsourcing unfairly) clearly outweighs our ability to buy foriegn goods cheaper and get a little extra credit. If we don't, when the inevitable run on the dollar comes we and everyone else will regret it.

[Teallaura]

Thanks! :smile:

I got the first part but either that second paragraph is a little shy in the English department - or I'm way too tired from my trip today. It's a toss up on that but I haven't a clue what that paragraph said.

:shrug:

[Ryokan]

Thanks! :smile:

I got the first part but either that second paragraph is a little shy in the English department - or I'm way too tired from my trip today. It's a toss up on that but I haven't a clue what that paragraph said.

:shrug:

I am sure it was me. New baby=no sleep=incoherent!
I will try again in a bit. Basically our trade deficit is a sign our dollar is too strong. It means we can afford more foriegn goods but native producers and exporters get screwed. In the long run the dollar has to weaken so that the trade balances reaches equalibrium. THis can happen slowly via US policy, or fast in a run on the dollar that wrecks the global economy and requires years to recover from.

[Teallaura]

:thumb: Got it! Thanks!

I vote for 'wreck the global economy' as it requires less reliance on Washington to actually think...


:teeth:

[shadowmaster]

shadowamster just went on a cruise that stopped in France, England, Ireland, Scotland and Holland. The exchange rates were murder and the cost of everything high. Seems like a good motivation to stay home and not buy European goods.

[Jimmy Higgins]

I am sure it was me. New baby=no sleep=incoherent!
I will try again in a bit. Basically our trade deficit is a sign our dollar is too strong. It means we can afford more foriegn goods but native producers and exporters get screwed. In the long run the dollar has to weaken so that the trade balances reaches equalibrium. THis can happen slowly via US policy, or fast in a run on the dollar that wrecks the global economy and requires years to recover from.Huh?

Our dollar is too strong is evidenced from our trading deficit? You've got to be kidding me.

Canada's dollar has gained a bunch of strength since 2001. Yet our trade deficit with Canada has increased over $20 billion since 2001 (http://www.census.gov/foreign-trade/top/index.html#2007)(when comparing annual trade deficit in 2001 and 2006)!

Our trade deficit with China has quadtrupled since 1998!

And then look at the Euro, for Ireland and Italy. Has our trade deficit gone down as our dollar has to the Euro? Not really. It's gone up to $20 billion, up 15 and 33% since 2003.

Helping to weaken the dollar helps the US trade surplus, however, when looking at the stats, I'd have to say, the US trade deficit would need the dollar to bounce down to depression era levels in order to make the US more competitive.

[Ryokan]

Huh?

Our dollar is too strong is evidenced from our trading deficit? You've got to be kidding me.

Canada's dollar has gained a bunch of strength since 2001. Yet our trade deficit with Canada has increased over $20 billion since 2001 (http://www.census.gov/foreign-trade/top/index.html#2007)(when comparing annual trade deficit in 2001 and 2006)!

Our trade deficit with China has quadtrupled since 1998!

And then look at the Euro, for Ireland and Italy. Has our trade deficit gone down as our dollar has to the Euro? Not really. It's gone up to $20 billion, up 15 and 33% since 2003.

Helping to weaken the dollar helps the US trade surplus, however, when looking at the stats, I'd have to say, the US trade deficit would need the dollar to bounce down to depression era levels in order to make the US more competitive.
Important point. Our trade deficit in general does not correlate with the strength of our currency relative to any given currency, but rather more in general. As US currency becomes weaker, foriegn products in general become more expensive and so in general less are bought. Economic conditions in particular foriegn countries may or may not counteract this effect.
Also, the dollar as the good of exchange for fuel and as a source of stability for numerous foriegn central banks screws things up, as does our military power. So while in general, overtime, the trend i described is true, but at any given time some things might look weird.
And we don't need to be completely competitive, just more so, for me to be happy.

[Jimmy Higgins]

Important point. Our trade deficit in general does not correlate with the strength of our currency relative to any given currency, but rather more in general. As US currency becomes weaker, foriegn products in general become more expensive and so in general less are bought. Economic conditions in particular foriegn countries may or may not counteract this effect. Could you cite a few examples where, as an overall trend, we have gained from our currency drop with any nation with regards of bettering the deficit or increasing a surplus? I agree in principle, but overall, has it been demonstrated with any of our trading partners?
Also, the dollar as the good of exchange for fuel and as a source of stability for numerous foriegn central banks screws things up, as does our military power. So while in general, overtime, the trend i described is true, but at any given time some things might look weird.
And we don't need to be completely competitive, just more so, for me to be happy.And that is the bottom line for all involved in Global Markets... Ryokan's happiness. Isn't that why Wolfowitz really got fired? Trying to please you too much. :teeth:

[Teallaura]

:brood: Jimmy!!!!! Knock it off! He can't post baby pics and debate economics with you at the same time!

Priorities, man, priorities! :hmph:













We want pics, Dad.... :glare:

[shadowmaster]

heh heh heh

[WinterStag]

Our trade deficit with China has quadtrupled since 1998!


This one though has nothing to do with the value of dollar though as the Chinese Yuan floats in value proportional to the dollar.

[Teallaura]

This one though has nothing to do with the value of dollar though as the Chinese Yuan floats in value proportional to the dollar.:huh: Would you explain that one in English, please?

[WinterStag]

:huh: Would you explain that one in English, please?

While exchange rates usually vary between two currencies, the exchange rate between the US Dollar and the Chinese Yuan is always the same.

[Teallaura]

Okay, thanks! :smile:


Um, why? :huh:

[WinterStag]

Okay, thanks! :smile:


Um, why? :huh:

Because China has sets the value for the Yuan at certain rate, as in they will give you X number of Yuan for X number of dollars regardless how weak or strong the dollar is. This keeps the value of their currency artificially low, which they see as advantageous to their heavily export-based economy.

[Teallaura]

Oh, okay. Thanks again! :flowers:


I don't know a lot about Econ - can you tell? :blush:

[WinterStag]

Oh, okay. Thanks again! :flowers:


I don't know a lot about Econ - can you tell? :blush:

eh, most people don't. :smile:

My job involves a great deal of importing from both China and some south Asian countries so I spend a bit more time thinking about this stuff than most I imagine.

[shadowmaster]

heh heh

[No Trust]

Important point. Our trade deficit in general does not correlate with the strength of our currency relative to any given currency, but rather more in general. As US currency becomes weaker, foriegn products in general become more expensive and so in general less are bought. Economic conditions in particular foriegn countries may or may not counteract this effect.
Also, the dollar as the good of exchange for fuel and as a source of stability for numerous foriegn central banks screws things up, as does our military power. So while in general, overtime, the trend i described is true, but at any given time some things might look weird.
And we don't need to be completely competitive, just more so, for me to be happy.
As US currency weakens, goods in general become more expensive in terms of US dollars, not just foreign-made goods.

[shadowmaster]

heh?