[BurlyShirley]

...you know, in terms of the US's internal economy?

At some point, wouldnt it stop being profitable for US companies to outsource if it were cheaper to manufacture here? Thereby creating MORE jobs in the US?
Wouldnt it become MORE expensive to import items that we must purchase internationally, than to manufacture here?

 

[Echo]

I think theoretically that's possible, but the dollar would have to be devalued so badly before that scenario went into effect that the world economy would be ruined.

 

[reflux]

Even if the US dollar were to be devalued against other currencies, we would still have the problem of the Chinese currency being tied to the US dollar. However, the Chinese gov't is pumping so much money (read: T-bills) into the US, that the chances of any significant devaluation of the US dollar is unlikely.

 

[dogwonder]

It's good if you are a US based company. For instance, all the tourist destinations have seen large increases in international visitors (mostly Europeans) now that trips to the US are "cheap"

 

[Westy]

The larger problem is that many countries such as China and South Korea hold billions of US dollars (The $20 savings bond grandma gave you for your birthday isn't funding deficit spending). If the dollar continued to drop they would sell off in favor of other currency, causing a worldwide dump. This would pretty much cause the dollar to become worthless and ruin the economy. One of the advantages of having foreign countries fund our trillions worth of debt and deficit spending.

 

[LordOpie]

I hear ya Westy, but that wouldn't happen as the US is a dominant market force. If they dumped their t-bills, then the dollar would plummet wreaking more havok on the world in general.

While they may get pleasure of seeing us on our knees, they'd hurt themselves horribly in the process.

 

[Westy]

I hear ya Westy, but that wouldn't happen as the US is a dominant market force. If they dumped their t-bills, then the dollar would plummet wreaking more havok on the world in general.

While they may get pleasure of seeing us on our knees, they'd hurt themselves horribly in the process.

I'm not talking about them selling for political reasons but financial ones. If they saw the dollar was going to drop significantly because of inflation they would lose billions, they might figure that getting out early would be the only way to save something. When the dollar first started to drop a few years ago South Korea tried to unload a few hundred billion and the US used some diplomacy to stop them as it would scare others into doing to same. I couldn't find a reference as any search just brought up thousands of returns to more recent headlines.

Now as far as political reasons go China and the US have kind of have the ultimate war deterrent, total mutual financial destruction. Probably much more effective than the nuclear kind. The world would be a much safer place if we fought the cold war on more of an economic front.

 

[jaydee]

...you know, in terms of the US's internal economy?

At some point, wouldnt it stop being profitable for US companies to outsource if it were cheaper to manufacture here? Thereby creating MORE jobs in the US?
Wouldnt it become MORE expensive to import items that we must purchase internationally, than to manufacture here?

Maybe when your dollar gets down around the value of a peso you won't have as much grief with people from south of the border illegally crossing into the States to work.

 

[Ciaran]

Maybe when your dollar gets down around the value of a peso you won't have as much grief with people from south of the border illegally crossing into the States to work.

You'll get there first. Last I checked (this morning) the Canadian dollar was still worth less than an American dollar.

 

[jaydee]

You'll get there first. Last I checked (this morning) the Canadian dollar was still worth less than an American dollar.

Ya, but we've been calling our dollar a Canuck peso for years. Now it's finally starting to be worth something again.

 

[Silver]

You'll get there first. Last I checked (this morning) the Canadian dollar was still worth less than an American dollar.

Just for giggles, plot the US dollar vs. the Loonie over the past 3 years.

 

[Transcend]

Ya. You get $1.08cnd per $1.00usd as of the other day. Far cry from the 1.60 of 2 years ago.

 

[Changleen]

Wow, It's that close now?

 

[ALEXIS_DH]

1.00 USD United States Dollars = 1.11394 CAD Canada Dollars right now....

holy crap! i had to google it to believe it...

 

[DaveW]

Makes me laugh to think that back in the 1950's the $NZ was worth more than the $US.... Traded around $1.40-50 for $1NZ.

 

[ALEXIS_DH]

Makes me laugh to think that back in the 1950's the $NZ was worth more than the $US.... Traded around $1.40-50 for $1NZ. :rolf:

i beat yo ass!!!!!!!!!!...

today (if currency had not changed twice for the sake of erasing the zeros) 40 peruvian units for US$1 in 1975.. to 3250000000 peruvian units for US$1 in 2006.

take that economics-school-where-the-central-bank-chiefs-got-their-degrees...!