Ed Norton
Veteran
Others have more training in this type of thing, but, a falling dollar boosts American Exports which drives jobs while reducing our imbalance of payments for goods and services purchased abroad: it becomes relatively cheaper for foreign airlines to outsource their maintenance to American Airlines and our overhaul bases.
It also drives purchases by US based companies of US products versus buying same from foreign firms also driving increases in US wages and production by US firms. For several years, the US has complained that artificial devaluation of Chinese imports has hurt American producers of the same type.
The exposure to the subprime market, and the housing woes, of US based financial firms led to an explosive dumping of liquidity into the financial system by the Federal Reserve: more dollars, less value.
The question is why Washington has allowed this explosion in the money supply on behalf of the US financial industry when the response was raising the typical interest rates for mortgages that infusion was designed to calm. I guess Congress and the Fed wanted to save US Financial firms while stiffing the US Citizens. Given the rise in the money supply versus the increase in mortgage interest, I can only assume that the Fed saw a balancing between the bite homeowners could afford versus devaluation that would drive foreigners from investing in dollar valuated investments.
You have a good understanding of economic theory, probably more than I do. My question to you is: just what is it that we export? Shoes? Electronics? Computers? Appliances? Automobiles? Even the Taliban prefers Toyota!
The truth is that we have no industry to speak of to export that would justify the dollar devaluation. Its a fire sale (more like a mob bust out) of the United States and a plundering of the wealth of the American people. The only ones benefiting are the ruling elite and their lackey politicians. :down: