What fool actually believes the weak dollar is good?

Question

Americans are brainwashed to believe the weak dollar encourages selling as if the entire nation wil benefit. Just ask any third world nation what a weak dollar means and they will tell you exactly what it really means: YOU are a poor country as America will soon be if the dollar continues to fall.

READ THE QUESTION AND DETAILS. I know that reading comprehension is weak for Americans but give it a try. Try to answer THE question via the details without adding what YOU like.

Answer 1

Good or bad for whom? Your ego?

Weak dollar is good for American economy because
1. It encourages Americans to buy American products as opposed to imports.
2. It makes American exports cheaper to buy overseas.

Answer 2

A weak dollar has its own benefits and disadvantages.

In 2005, the United States had a trade deficit of $ 747 billion because it imported more value of products than it did with exports. With a trade deficit, the national GDP will be low. To deal with the deficit, currency needs to get weaker.

Logically, strong currencies such as a Euro allow the owners of a strong currency to import more products because strong currencies have high purchasing power. Meanwhile, weak currencies make domestic products cheaper because the production of the goods is paid in weak currencies. Therefore, foreign nations will want to buy cheap products like those from China, thus increasing exports.

Overall, weak currencies are beneficial for encouraging exports. Domestic producers feel blessed with the rising popularity of their cheap products in foreign market. Otherwise, we consumers/investors feel cursed because we have to pay more for foreign products and services.

So, do not lament about the day of weak currencies. Eventually, when there is a trade surplus, the dollar will grow in strength again.

Answer 3

China has been keeping its currency weak and growing its GDP at 10% a year and accumulating foreign assets. Unfortunately the $ is not weak because of this kind of policy but because we have been borrowing too much money from the rest of the world, which is a way to become poorer.