Do you expect the US dollar to weaken even further?

Question

Do you expect the US dollar to weaken further? If other countries move away from the US dollar what will this mean for the long term? Will things be more expensive for Americans? Won't the US debt be harder to pay off? Any thoughts welcome.

Answer 1

yes, i expect the dollar to weaken further.

some 70% of our economy is work income. Our commanding position in the world economy was built on the strength of our commanding position in proportion of our work force with a college education [the WWII era GI Bill created this commanding position because most potential competitors were so devasted by the war that they had to rebuild their domestic economy while we improved the knowledge our workers applied in the economy].

since our lead in average educational level achieved and proportion of workers with a college education is being pared away, our relative value added per work hour advantage is also being pared away, and the dollar's value falls to reflect this.

perhaps oddly, i do not think this will have a huge impact on our standard of living ... we'll have more and more foreigners to sell our goods to who will be able to afford to buy them.

imho, much of the expensive parts of our standard of living are made in Washington, DC by Congress. Another portion are the result of our self-indulgent life style -- but not to worry as Universe (or God, if you prefer) is already sending out the little lessons that will correct this.

Now ... the US debt isn't what you think it is. It isn't like a family's debt ... the country doesn't die (we hope). So, as long as the total debt service (interest only) is reasonable in proportion to the size of our total economy, it isn't a serious problem.

The threat is that Congress keeps finding ways to spend more and more money to buy votes. What with government being one of the most inefficient suppliers of nearly everything, when Congress spends more everyone's income tends to go down because of the added inefficiencies and vote buying boondoggles.

The proposal to nationalize 1/7th of the US economy (health care), strikes me as very dangerous in exactly this way. The average US program requires 25% extra cost just for administration. Apply this to 1/7th of the whole economy and about 4% of everyone's gross (pre-tax) paychecks disappears down the rathole.

And that doesn't count the lost value and productivity from the inevitable waiting for medical service that will come with national health care.

[Mr. Moore's movie didn't show the months of waiting for a simple MRI that is required in Canada, nor the more months waiting to see the neurologist who will eventually diagnose the brain cancer seen in the MRI scan that is then too old to be useful for the brain surgery that might save the patient's life -- if the Canadian health care system could even schedule the surgery in less than months, which it can't -- the American system does the whole thing from MRI through surgery in less than a week].

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How you can get ahead in life continues to be the same as before all these momentous changes -- work and invest. You can use capital goods to leverage your work efforts [aren't computers nice?]. Adding knowledge (education) and health to your work are also useful leverage. [Although the number of hours the average American works is already the world's highest, so we have little room for improvement on the 'health leading to more work' front.]

does this help?

Answer 2

Even though it seems that way, probably kept that way to strengthening US exports by weakening the Us dollar could be a possibility. Wars usually are fought in order to create more jobs and business thus making us think the dollar can rise again.

Answer 3

they do no longer seem to be intentionally weaking the dollar they try to instantaneous different markets into pumping a refund into the financial gadget, i. e. the loan marketplace. reducing expenditures makes it extra fee-effective to get shape loans, corporation loans, customer loans, and mortgages. Which in all human beings use those loans to speculate in corporation which in the fast term weakens the dollar and in the long term revives it. it would do you properly to no longer hear to the information total heartedly, a central authority would in no way weaken its very own distant places money on purpose, those are area effects of making an investment, in basic terms like a sparkling corporation you will desire to spend money previously you may make it.

Answer 4

Don't know what it will do in the future, but there are advantages as well as disadvantages to a strong or a weak dollar.

Strengthening Dollar
Advantages

* Consumer sees lower prices on foreign products/services.
* Lower prices on foreign products/services help keep inflation low.
* U.S. consumers benefit when they travel to foreign countries.
* U.S. investors can purchase foreign stocks/bonds at "lower" prices.

Disadvantages

* U.S. firms find it harder to compete in foreign markets.
* U.S. firms must compete with lower priced foreign goods.
* Foreign tourists find it more expensive to visit U.S.
* More difficult for foreign investors to provide capital to U.S. in times of heavy U.S. borrowing.

Weakening Dollar
Advantages

* U.S. firms find it easier to sell goods in foreign markets.
* U.S. firms find less competitive pressure to keep prices low.
* More foreign tourists can afford to visit the U.S.
* U.S. capital markets become more attractive to foreign investors.

Disadvantages

* Consumers face higher prices on foreign products/services.
* Higher prices on foreign products contribute to higher cost-of-living.
* U.S. consumers find traveling abroad more costly.
* Harder for U.S. firms and investors to expand into foreign markets.