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Originally Posted by jreeves  Actually the employment rate plays only a small part in the value of the dollar. |
Really? Let's see if you really understand why
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The dollar has been losing value, weakening its status as the world’s major currency and setting off jitters in the international financial system.
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Yes! Quote:
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The falling dollar is not just a technical matter for financial market experts: trillions of dollars in value have shifted in the course of about eighteen months, reducing the reserves of the world’s central banks and knocking down the value of all US assets on the international marketplace.
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Why? Where did the dollars value go and why did it go?
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Analysts worry that a serious dollar selloff could create panic in the markets and lead to a global financial meltdown. Even if the worst-case is averted, a declining dollar may weaken the power of the United States, reorganize global markets and shift strategic power in the international system
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Yes, but I'm still waiting to see if you'll tell us
why this happened. Quote:
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After rising sharply against the Euro during 1999 and most of 2000, the dollar started to tumble in late 2001 and it continued its decline through mid-2003, losing more than a quarter of its value against the euro (see "The Dollar's Ebb and Flow"). After a brief rally in the summer, the dollar started another steep retreat that is likely to continue. Many financial analysts expected the dollar to weaken because of the growing US trade deficit on its “current account,” which includes goods and services, income payments such as interest and dividends and unilateral transfers such as foreign aid and worker remittances (see chart). But few thought the dollar would fall so far and so fast.
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Yes. Still ...
why is this happening? Quote:
| The biggest single factor in the dollar’s fall has been the soaring deficit in US trade.
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Bingo!
And
why is there a soaring deficit? Quote:
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The United States imports far more than it exports in goods and services. US consumers have a strong appetite for Japanese automobiles, Chinese clothing, German machinery and Finnish mobile phones.
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An appitite that thee public would have trouble not feeding because why?
Because FREE TRADE makes it problematic for american manufacturers to compete with third world imports, mostly.
And when that happens, and millions of industrial jobs (including managments jobs, mind you) go off shore, how much taxes can those displaced workers pay?
Less than they could, that's for damned sure.
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Oil imports, by far the largest item, grow steadily.
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Okay.
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US companies are not able to export products and services of the same value.
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That's because we don't make as much stuff.
Our trade policies have been perverted to benefit hi tech industry at the expense of low tech industry.
Hence while General Electric
(et al) might be selling jet engines or nuclear technology, they are ONLY doing so
because those nations which make lo tech stuff are allowed to import their stuff, thus putting more Americans in lo tech industries OUT of WORK.
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While Microsoft, Coca Cola, Boeing and Hollywood may wrack up large earnings and gain high visibility for US exports, they simply cannot match the foreign products and services purchased by US companies and consumers. In 2002, imports of goods and services totaled $1,652 billion, while exports amounted to only $1,203 billion. The difference is made up by net foreign lending and investments.
Fall of the Dollar - Social and Economic Policy - Global Policy Forum |
Yup, you get it...sort of, I think.
And yet you start out by claiming that more or less Americans working have little to do with the decline or rise in the dollar in comparison to other currencies..
Clearly there
is a connection between how many Americans are working (and paying taxes and buying stuff made in the USA) to the decline of the dollar against other currencies.
I don't think either of us is missing that, yet somehow you arrived at the place where you thought I was wrong?!
I'm confused, or perhaps you missed telling me something that you think what you and I can both agree is the root source of the problem, negates my point that working Americans make the dollar stronger?