If the economy is so great, how come the dollar is so low overseas?

Question

Wages are getting lower, everyone is having problems, and yet the economy is supposed to be great.

Answer 1

The world economy is great. The US economy is heading for a big and permanent downturn after which the US standard of living will be considerably lower and it won't comeback. The biggest speed bump in the world economy growth is the coming crash of the US market. ( America buys most of what the world produces. US personal, corporate, and gov't debt are way above previous record highs and the US will NOT be able to continue to consume at this pace when we don't produce anything compared to what we consume.) I would suggest investing in funds that invest in natural resources globally. If you really want a safe hedge, invest in the british pound directly. You really need to do your home work on this yourself. Any advisor you talk to will just sell you whatever products they carry which will NOT be what you need. In short: Get your money out of the US.

Answer 2

Simple. The economy isn't that great. That's why the dollar is so low overseas.

Bush is spending like a drunken sailor (drunken airman? drunken Harvard frat-boy cheerleader? Drunken Texas oilpatch failure?). the US government is issuing bonds left and right to pay for the Iraq war, pay for that fancy Medicare Prescription plan to give money to his buddies in the Pharmaceuticals business, pay for the missing taxes after tax breaks for the rich. The world is flooded in US government bonds, "promises to pay" in American dollars. they are selling at such a discount that the only ones willing to buy are the Chinese government, who get a lot of the consumer dollars that get spent by the average Joe.

China operates on a different logic, being Communist. they just want to keep people buying the carpola their factories turn out. They don't care if the central government loses a bit in the process. Better to end up holding more and more US bonds worth less and less, than to have a billion chinese unemployed and very annoyed at their central government.

Sooner or later this treadmill will come to a screeching halt and the US economy will tank, along with the Chinese economy and so the rest of the world. Bush just hopes it won't be until he leaves office.

Answer 3

The only place that is saying that the economy is great is up there on "The Hill". Thats what they want you to believe.

Answer 4

The value of the dollar is artificial. The dollar has been allowed to drop so that American exports can compete.