Weaker dollar better for U.S. right now?

[low_delta]

Bye-bye strong dollar policy

This story didn't explain much to me, but on the message board, someone who calls himself wonderbread posted this explanation:

Weaker dollar better for U.S. right now
A weaker dollar means that the goods and services we produce in the United States are cheaper to the rest of the world, that means we sell more of them. A weaker dollar also means that imports are more expensive, meaning that we would then buy more more domestic goods and services. The only downfall are things which we can't produce at home to satisfy domestic demand - namely oil. However, we are just happening to occupy right now a foreign nation with the world's 2nd largest oil reserves.

Weaker dollar? Good. Don't be fooled by the words "weaker" and "stronger". Used in this context, their implicit meanings are misleading.

If anyone remembers back to about 1994, the huge economic boom of the mid to late '90's was preceeded, and helped along, by a weak U.S. dollar.

In other words, a weak dollar isn't necessarily good, but it's not something to get very worried about.

Comments

[penpusher.livejournal.com]

What is this? The "smoke and mirrors" economist propaganda?

If you wanted to "sell more goods and services abroad" you would lower the prices, not celebrate a "weak dollar."

This demonstrates just how bad off the situation REALLY is, and it could be that we actually are in a worse situation than the 1930s turned out to be, artificially propped up by credit cards and other loans.

Having control of Iraq's oil fields will go a long way toward bolstering the sagging situation, but will it be enough? Or do we need to attack another country with an evil dictator, who just happens to have more resources that we can use?

The rules of the game clearly state: when the economists begin to make something that's clearly bad seem good, it's time to get out as quickly as you can and start investing in real estate and gold.

Of course, that assumes you have some available "weak dollars" to do it.

[banana.livejournal.com]

The downsides to a low currency are that it indicates that speculators think your economy is going down, and that it costs you more to go abroad. Neither of these is terminal.

The US produces a lot of oil, but consumes a vast amount, so that problem is self-inflicted. If oil is too expensive, don't buy so much of it.