Quite an in-depth piece for a change, especially from places like MSN, which sometimes tend to shortchange reporting of the facts. Can’t argue with this one. This will also help explain or at least ‘fill in some blanks’ why some companies switched to euro-denominated prices (like Slysoft recently, which I totally understand). See this article here.
What some see as a decline in the dollar I see as an enevitable leveling of it against various currencies around the world. For years the USA has promoted the economic development of the third world and we are finally seeing the fruits of our labor. They, in turn, will have to face the results of a stronger economy and part of that is their currency will gain strength against the dollar, Euro etc. As with most things a devalued dollar is not all bad. By promoting better economies in the third world we are also developing markets to which we can export goods. Many of the countries complaining have enjoyed an imbalance of trade for decades with the USA. That dynamic is going to change now. These newly developing countries can’t have their cake and eat it too.
IMO, the USA’s big advantage in competing globally is in our flexibility to morph our economy to current conditions and to innovate accordingly. We can see it happening right before our eyes in that our exports are rising substantially. Combine this with our capitalistic system that rewards companies that provide good products/services at competitive prices and many of the countries that have enjoyed unfettered exporting to the USA may now find the tables have turned.
If there is anything that worries me about the USA right now it is our lack of producing more college graduates with a science or technology background. We need to keep our backbone of technological innovation strong or it will create severe problems in the future. A well educated population is vital for any country to be competitive in a global economy.
This would be fine if the other countries played fair but they do not
The USA gives up everything and in return they get nothing. I do agree that the dollar going down is not bad but when China controls there money and will not let it change in value the USA gets the shorter end of the stick.
This is why we have international agreements for promoting fair trade. We are seeing the results of this in the declining value of the dollar among other things. China is the next country that will have to revise their policy toward their currency. We are in the middle of a global economic realignment. Many countries will have to adjust to the new realities. It is our economic flexibility and adherence to free trade principles that will win the day in the end, IMO.
In todays world there is no such thing as [B]Fair Play[/B]
The dollar has devalued a lot compared to e.g. the Euro in the last seven years as explained by the article, but that is from the extreme high point to which the dollar had been climbing in the years before that.
What goes up must come down as they say.
The dollar may very well climb a lot again and then decline again and then climb and then…
I don’t think the oil companies ever heard the saying
There goes our neighborhood!
Was not much of a neighborhood anyway needed to be redone.:)
The oil companies (actually speaking of OPEC overseas) would like to get oil denominated in euros, so that could go way up in price if they follow through with that (although there’s actually nothing to justify a cost higher than $65/barrel at worst).
Declining dollar also means you need to cut your pay/hour by 1/3 and that’s what you’re making. So someone at 10/hr actually has purchasing power of 6.67. Now that’s that part of it that really hurts.