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who cares? contrary to popular belief, a weak dollar is not a bad thing. it is actually good for the domestic economy. it allows direct foreign investment & spending in the u.s. which helps to balance out the horrendous current account deficit that we have been running. a currency is not a scorecard to judge how our domestic economy is doing against the rest of the world. in fact, its not even a contest.

policy makers who are not aware of these basic economic principals or who clouds them with extraneous ideas better have a damn good reason.


is there any wonder why the dollar is weak?



The biggest problem posed by a weak dollar is inflation. The more concerning aspect is that the twin deficits require that our government borrow to finance the shortfalls. As a result, we end up paying US$ billions annually in interest; much of which go to foreign entities. This is called a "poor allocation of resources".


so a strong(er) dollar would help the 2 deficits? isn't the current account deficit the direct result of a booming economy & that is what gives rise to a strong dollar & also causes inflation on the side? with the budget deficit being a whole other (fiscal) story? wouldn't a weak dollar work toward lowering the current account deficit & help control spending from the private & govt sectors & thereby lowering inflation?

and to follow the u.s. govt borrowing money to finance the deficits logic: to lend money to the us, foreigner must buy u.s. treasuries with us dollars & shouldn't that strengthen the greenback? which btw, is how the chinese is keeping its currency from going through the roof.

Ezra Roizen

I thought Harry Stonecipher (CEO of Boeing) made an interesting comment on the dollar in the most recent issue of time:

TIME: How do you feel about the U.S. economy and especially the trade deficit?

STONECIPHER: The economy is in good shape. And I don't understand why people are jumping up and down about the "weakness" of the dollar. It's perfect. I think it's just a problem Americans have with the word weak. We should change it to "a marketeer's dream."



our spending power (economy) is going so strong, it doesn't look like the weak dollar is helping the current account:

U.S. Trade Deficit Grew to $58.3 Bln in January as Imports Surge to Record

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