why is the us dollar so weak ?

Question

what is the consequence for economie?

Answer 1

1) Iraq War-- Huge defecit spending
2) Loss of manufacturing to "outsourcing"
3) Housing market collapse
4) Oil prices
5) "Defunding" of our economy caused by immigrants sending money to the "homeland"
6) Corporations avoiding taxes by use of "offshore" banks
7) Lack of confidence in our government to make sound decisions

I could go on, but as you can see, lots of issues here.

Answer 2

I see a lot of answers, most of them not well thought out.

Of course there are a number of reasons for the decline of the US dollar against some other currencies. The trade deficiet is likely a big one. The US has imported more than it has exported for years, and to correct this, the value of the dollar declines, making imports more expensive in the us, and exports cheaper for others. So the weak dollar helps to correct the current account.

The other side of the current account is the capital account. And this is just as important of an issue. The US has been the preferred place for investors to keep thier money, but that is changing. Investors are finding that many other economies have stable environments with strong returns. Investors, and central banks, are moving money to other currencies, weakening demand for the dollar, and increasing demand for other currencies.

Answer 3

1. There are potential risks in the U. S. markets related to sub-prime mortgage lending, therefore, causing some global investors to sell dollars in order to purchase investments in other countries.

2. The Federal Reserve recently lowered the Fed Funds rate, which will in turn lower other U. S. interest rates, creating more desire for the global investors to sell their dollar investments in search of higher yields in foreign currency investments.

3. The Federal Reserve is increasing liquidity in the U. S. capital markets to assist with potential credit problems resulting from increased worries related to the U. S. economy, thus increasing the supply of dollars, while demand is decreasing.

The effects will be that foreign products will be more expensive for U. S. consumers to purchase, therefore, causing American consumers to seek domestic alternatives for wines, vacations, cars, electronics, etc. In turn, the foreign consumers will be more attracted to U. S. products over their own for the opposite reason. The U. S. economy will strengthen from reducing imports while increasing exports.

Answer 4

Bottom line is the world is betting that the U.S. economy is heading for a real "adjustment"...the housing bubble in conjunction with giving mortgages to those who don't deserve them, and car loans and credit cards have put the economy is a precarious position...plus with the wars we are spending a ton of money...the FED is pumping tons cash into the system (which inherently makes every dollar worth less) to keep the economy liquid. Economists all over the world see this and as such they expect the economy to slow way down (recess) and as such don't want to be holding dollars.

Answer 5

A weak dollar makes for expensive travel outside the US.

It also makes goods and service that are coming into the US more expensive. So you will pay more for these goods and services then before.

However, it makes foreign investors and foreign buyers have a shopping spree in the US. Our products sold in US will be much cheaper when bought outside the US with other currencies.

Recently, many Canadians have been coming across the border on shopping sprees.

Answer 6

Because we do not save and both individuals and and the government have been going into debt. Since the is no net savings in the US the debt has been financed by foreigners investing in US assets, and they have become wary of extending any more credit. The way international markets respond to this shortfall is to devalue the dollar, so new investors in the US will get a higher effective return on their investments,

Answer 7

america is going on war with iran
iraq
afghanistan
they just did a deal with n-korea and now wanna do a nuclear deal with india and if indiansign the contrat than india is in total profit plus usa give's india 30billion£ so basically america wants to brag about money even though they are in debt with the world bank so what do u expect even euro is more powerfull than dollar shame on america countries progress this one is going down

also india and china are main markets all factories and supermarket go there and improt from there so more profit there less in america coz america's products are to costly
america one yankee cap cost - atleast8$
india same cap cost - no more than 2$
which would u prefer if u was a business man

Answer 8

More imports than exports decreases the value of money in a given country...

Answer 9

So more people from other countries will spend more of their money over here, helping our economy.
.

Answer 10

George W Bush
Canadas dollar surpassed the U.S dollar last month, Thankgod
Wohoo, Honda civic went from 16,980 to 15,000