Reducing the value of the dollar overseas to sell more sounds like madman logic to me - it only makes the wealthy, more weathy, not the average consumer.
We don't reduce the subsidies to those exporting more, so they will do fine.
But for the average person it will just make all your goods and services more expensive.
So, give the wealthy the opportunity to ship twice the number of widgets at half the profit and they'll just have to give someone a job, regardless if it's the lowest possible paying jobs that will only be temporary anyway until the cost to make the widget also increases because of the supplies they need will now also cost twice as much.
Then when China out-deflates us to make the widgets even cheaper, all that temporary labor will be on unemployment and need taxpayer provided benefits and health care. Win-win for the factory owner.
A key point, as discussed in the Charlie Rose/Gordon Brown interview (above), is in the next 10-20 years when China's emerging middle class becomes consumers.
If the US is still in a position where its technology is superior and China's ~600 million new consumers demand and buy US technology, then it will result it massive US exports, windfall profits, and the perceived debt problem goes away.
Part of the US strategy is to make sure it's in a position where China's new middle class demand and buy US technology.
The average consumer is in a huge amount of dollar debt, and those dollars will become weaker too. It's people who are owed money (the wealthy) who are generally the inflation fighters.
Sounds good on the face of it, except that the evidence points in a completely different direction.
Have you ever seen any of these wealthy people you mention go to Washington to champion a strong dollar policy? I haven't. Have you ever seen Hu Jintao go to Washington to call for a stronger dollar? I have. We all have.
Perhaps the truth is closer to this: The US is in a huge amount of dollar debt, and those dollars will become weaker. It's the countries who are owed money (China) who are generally the inflation fighters.
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Reducing the value of the dollar overseas to sell more sounds like madman logic to me - it only makes the wealthy, more weathy, not the average consumer.
We don't reduce the subsidies to those exporting more, so they will do fine.
But for the average person it will just make all your goods and services more expensive.
Nonsense. A cheap currency promotes exports and reduces imports, and will strongly stimulate job grows, which is exactly what the U.S. needs now.
Job growth is also the reason why China is keeping its currency cheap: mass unemployment means instability.
Ah okay, trickle-down economics 2.0
So, give the wealthy the opportunity to ship twice the number of widgets at half the profit and they'll just have to give someone a job, regardless if it's the lowest possible paying jobs that will only be temporary anyway until the cost to make the widget also increases because of the supplies they need will now also cost twice as much.
Then when China out-deflates us to make the widgets even cheaper, all that temporary labor will be on unemployment and need taxpayer provided benefits and health care. Win-win for the factory owner.
A key point, as discussed in the Charlie Rose/Gordon Brown interview (above), is in the next 10-20 years when China's emerging middle class becomes consumers.
If the US is still in a position where its technology is superior and China's ~600 million new consumers demand and buy US technology, then it will result it massive US exports, windfall profits, and the perceived debt problem goes away. Part of the US strategy is to make sure it's in a position where China's new middle class demand and buy US technology.
These effects work for all industries, not just widget factories. Microsoft's highly paid engineers profit too.
And twice the number of widgets at half the profit - how is that a good deal for factory owners?
Finally, Portugal is a country with a very expensive currency. Because of that, unemployment is huge and they're in big trouble.
>it only makes the wealthy, more weathy, not the average consumer.
I mean honestly, who would have expected that?
The average consumer is in a huge amount of dollar debt, and those dollars will become weaker too. It's people who are owed money (the wealthy) who are generally the inflation fighters.
Sounds good on the face of it, except that the evidence points in a completely different direction.
Have you ever seen any of these wealthy people you mention go to Washington to champion a strong dollar policy? I haven't. Have you ever seen Hu Jintao go to Washington to call for a stronger dollar? I have. We all have.
Perhaps the truth is closer to this: The US is in a huge amount of dollar debt, and those dollars will become weaker. It's the countries who are owed money (China) who are generally the inflation fighters.