Why does the government allow the dollar to fall so much ?

Question

I know that the low exchange rate for the dollar helps export, but at the same time, it makes imports more expensive, and, it lowers confidence in the whole US economy which can lead to recession. So, why is it allowed?

Answer 1

I'm canadian and someone told me today that CDN$1 peaked yesterday at US$1.10!! YIKES!! Over the past year it's risen from US$0.90 to US$1.10! Now, at first, it seems like a good deal for canadians but really, it's not. It hurts our manufacturing and export industries and we're a resource based economy. What bothers me is how quickly the echange rate has changed. That's hard on business. It can change but more slowly and businesses can adjust. But a US$0.20 change in exchange in year is way too fast!

It's part of the Bush admin's strategy to kick start the US economy. It's been wallowing for years. meanwhile, other countries' economies are doing well, i.e. Canada. Lower the exhcange rate allows for more international trade and, hopefully, more business for the US. Let's see if this works. I, personally, think this rapid change in exchange is more hurtful than helpful.

Answer 2

it is a consequence of other government policies which Congress considers to be more important.

some of those policies are: [not in any known order]

1. tax structure out of tune with world and reality
2. energy policy all wrong
3. education policies not effective
4. investment discouraged by government
5. interfering with foreign trade


:(

Answer 3

the oil price,the huge deficit,the war...........the mortgage problem...are all higher priority...............