Weak Dollar Equals Weak Mind

Posted: November 9, 2010 in Technology and Business
Everyone wants a weak dollar… because they say it makes our exports more attractive.
What exports?  The few areas we have superior automation doesn’t nearly off-set the many areas where our labor costs kill us.  (Tough to compete with 3rd world sweat shops.)
Ironically — even sadly — for the exports that we do have a clear "value added" advantage… well, why in the world would we want to make those items cheaper?  We should be getting more, not less.
From a corporate perspective, most big U.S. companies derive about 50% of their revenues from overseas anyhow… so isn’t this all just a big corporate wash at the end of the day?
It may be a wash for a corporation… but not for U.S. consumers.  Here’s the awful truth:  A weaker dollar means a lot of the stuff we buy will be more expensive.
But it gets worse:  Since the world pegs oil prices to the dollar… a weaker dollar contributes to higher oil prices… and for regular readers of this blog, you know that means the price for absolutely everything we buy will be more, too.  A double whammy for us.
We know that Americans — the largest consuming engine on earth — have a breaking point.  Do we really want to test that again? 
Give me a stronger dollar any day.
Update:  Quote from Jim Rickards, sr. managing director at Omnis, a market intelligence firm:  "People buy a Boeing

aircraft because they are good planes," he said. "Not because the dollar is weak.  EXACTLY.

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