Reality...? Not on Dubbyuh's watch!

[Bullypulpit]

<center><h2><font color=red>Reality does not enter into Dubbyuh's lexicon</font></h2></center>

Yet again, Dubbyuh's words and actions diverge from each other. Since 2003, the dollar has declined nearly 25% against the euro. Dubbyuh contends that he believes in maintaining a strong dollar. Yet the dollar continues the unchecked free-fall it has been in since 2001.

Granted, this makes US exports cheaper overseas, but America continues to import far more than it exports and the continuing trade deficit is saturating foreign markets with dollars. In some of these markets, China in particular, currency traders are exchanging their dollars for renminbi which they view as being safer than the dollar.

Despite its "strong dollar" rhetoric, the Bush administration sees a weakening dollar as a means of getting a handle on the trade deficit. The problem here though is that while it provides some relief for US exporters, it leaves the rest of us open to sharp inflationary spikes and higher interest rates. But if you don't play in the Bush League, which most Americans don't, you're just shit outta luck.

The only sensible solution to the problem is to address the ballooning budget deficit. There is a direct correlation between the dollars slide and the runaway deficit spending of Dubbyuh and his merry band. But that would put a crimp in their ability to provide tax-cuts to their corporate pimps and johns. And, a viable social safety-net doesn't even make it on their radar screen.

So when the dollar and the US economy crash don't blame me. I voted for Kerry.

 

[Merlin1047]

So when the dollar and the US economy crash don't blame me. I voted for Kerry.

I agree that the deficit needs to be reduced - eventually. Meantime, a weak dollar has benefits which probably outweigh its drawbacks. A weak dollar causes us to pay more for crude oil. That raises the price of gasoline and eventually that exerts inflationary pressures on the economy. But a weaker dollar makes foreign goods more expensive and therefore gives domestic companies a more competitive footing. That's good for the job market, which in turn provides increased government revenue through taxes, which in turn provides the means to reduce the national debt.

Personally, I don't give a rip if french wine or German Porsches get more expensive. Matter of fact, I'm rather looking forward to it.

 

[Bullypulpit]

I agree that the deficit needs to be reduced - eventually. Meantime, a weak dollar has benefits which probably outweigh its drawbacks. A weak dollar causes us to pay more for crude oil. That raises the price of gasoline and eventually that exerts inflationary pressures on the economy. But a weaker dollar makes foreign goods more expensive and therefore gives domestic companies a more competitive footing. That's good for the job market, which in turn provides increased government revenue through taxes, which in turn provides the means to reduce the national debt.

Personally, I don't give a rip if french wine or German Porsches get more expensive. Matter of fact, I'm rather looking forward to it.

I don't give a fat rat's ass about the price of French wine or a German Porsche either. But there's more to it than that old son. Foreign currency traders are dumping the greenback as a reserve currency, and shows a world which is increasingly convinced that America is bankrupt, both morally and financially. This flight from the dollar will only accelerate the decline in the American standard of living, and give our creditor nations even less incentive to buy American debt.

 

[drowe]

There is no argument, the dollar is weak right now. I'm making the best of it and shuffling my portfolio to purchase mutual funds or ETF's that invest in foreign companies.

I think the argument here is what the effect will be from a weak dollar. If the dollar remains weak - bad. If the dollar is weak now and bounces back upwards by early 2006 - good.

I'll give Greenspan a jingle in the morning for his suggestions and I'll get back to ya!