You've got your George Washingtons, your Jacksons, your Hamiltons, and (if you're lucky), your Benjamins. Life seems pretty good. Until you realize that they're not as strong as they used to be. That's right, the dollar's a fallin' folks. What does this mean for Americans? Well, for one, travel abroad ain't cheap. Spend some time in any EU country, and you're spending nearly twice as much for a night at the Holiday Inn as you would in New York. Second, it could potentially lead to higher interest rates. On the flip side, the lower-valued dollar could stimulate US exports, keeping American workers busy and in demand. Then again, on the flip of the flip, imports are now more expensive, meaning that I'll have to think twice about getting that Benz I've been eyeing (ha). Solution? I say we just chuck it all and escape to Peru where the exchange rate is 3 nuevos soles for 1 US dollar.
Blog Of The Nation
October 10, 2007
Living and working in Lake Placid, NY, we have seen a tremndous increase in Canadian tourism, which has helped us in an otherwise slower economy.
I got a contract to do a report for a European agency earlier this year for 5,000 Euros, and when the report is due next month, I will have earned many more dollars than when I signed the contract. More money for nothing added! In all seriousness, I recall when shoppers in the Northern tier used to go to Canada regularly to shop, and now that trend has turned, to the benefit of businesses from Buffalo to Detroit to Seattle. Yes, I am less likely to travel to Europe now, but I visited several trips to National Parks this summer, and they were filled with Germans--in rented RVs. I am actually glad, given the reputational hit the US has taken worldwide under the Bush presidency, that there is now a financial incentive for foreigners to visit the US, and to see what a wonderful people we really are, and how unrepresentative George Bush is of us.
The falling doallr is truly impacting me. I am a military member living in Germany. In the 20 years I've served, I've spent 17 of them overseas and this is the worst its ever been. As it is, servicemembers don't make very much money and these days it feels like less. We get paid in dollars but pay for everything in Euros and it hurts a lot. I'm actually in Afghanistan right now, but I'm afraid its really hurting my family back in Germany.
There is hardly any mention of the war in Iraq on the effect of the declining dollar. Please comment.
As the benchmark for oil is US Sweet crude priced in dollars, what part of the increased oil price is atributed to the weak dollar?
I am a Canadian living in the US. The stronger Canadian dollar (sorry, that's how I see it!) means my parents can afford to visit their grandchildren more so I see a definite up side.
What fraction of the US trade imbalance represents oil imports? What has the price of oil done when expressed in Euros?
I've always wondered: who decides the price of currency?
We live in Germany and we have noticed especially when we pay our rent as we get paid in dollars. Otherwise, I don't think about it because I would probably not leave the house if I did!
Good income is better, business improved, salaries get better, but retired senior who planned a lifetime to travel abroad, the weak dollar has seriously limited our golden years. Are there places abroad where the dollar is still strong?
If the declining value of the dollar makes our goods more attractive abroad, why has our trade deficit increased while our dollar has lost value?
If a nation is a net importer, which the US unquestionably is, then a weak currency will, in the short term, be a net negative, because inflation in the imports will outweigh the additional exports. Just look at the price of oil as an example.
How anyone can spin the debasement of our currency via negative real interest rates as net positive for the US is beyond me.
I think your guest economist was far too optimistic and almost naive about the fall of the dollar and its effects on Americans. When one considers how wages haven't kept pace with inflation and how oil prices continue to rise, Americans are going to feel the pinch or punch from the weak dollar. Why didn't your guest mention how our country cannot stop borrowing to pay its debts, the money printing machine is finally showing its effects. Funny how most the commentary was about how a cup of coffe was $8.00 dollars in Europe. let me remind you most Americans dont have the funds to go to Europe for vacations. Poor discussion on a potentially life changing situatuion.
My company owns a software services company in India. We provide Salesforce.com consulting both in the US and Asia Pacific region.
Before the recent decline in the USD one $ would buy us 43 Indian Rupees; now our $ buys only 39 Indian Rupees. Subsequently we need to send more $$ to continue providing the same level of services to our customer.
Dear General Reno and Neil,
My vote is for the wonderful Aaron Copland arrangements of traditional folk songs "Old American Songs". "The Dodger" is probably my favorite but they're all great.
Sure the dollar is falling but where are you travelers buying your coffee. I go to Italy and other parts of the EU about 4 times a year and just got back last week from Venice and I have never paid more than 3 bucks for coffee and often as low as a dollar right in Venice. You must have been at 4 star hotels on the tourist trap strips. Learn to walk a block.
Just what Americans need - less incentive to travel overseas and educate themselves about other cultures. While international students within the States are valuable cultural resources, they're no substitute for seeing the world yourself.
And, I heart the "country guy" for bringing up Reagan trickle down economics in this context. :)
By destroying the full amount of the dollar, we as a nation are losing our only means of economic leadership. Companies can argue all day about how good it is for exports, although, rarely do I see anything substantial exported from the US. Jobs are lost, consumers pay higher prices and China keeps winning the economic war, which may lead to very serious concequenses for our country as a democracy in the future. It is a stupid policy to continue decreasing the amount of the dollar. Bad for the American consumer, Bad for democracy, Bad for our ever increasing deficiet and future taxes for future generations. The people controlling the dollar and trade are supposed to be cholars from Ivy League coleges, yet layment and the middle class have better insight than they do.
i am retired on social security in the Philippines and their poor countrys currency has risen shaply against the dollar. i do not export anything , i just lose. daniel
I work in the entertainment and media strategy/production business. Our clients are broadcasters around the world. While the dollar was dropping we continued to get killed on travel, lodging and per diem expenses and lose out on currency fluctuations relative to our contracts. So we changed our billing currency to Euros and Pounds. And now that is our transactional currency
Look at the bright side. The economy is crashing relative to other nations'. This means fewer illegal aliens coming into the US and increasing prices for cocaine and other imported drugs. I fully expect the Administration to take credit for this.
I'm glad NPR decided to focus on this issue about the declining US dollar.Many banks and corporations laud the leverage they garner from offshoring and outsourcing parts of their business to other countries & nations like India, Philippines, & China. While these businesses save costs all in the name of the global marketplace, mainly in terms of labor, US jobs dwindle. However, with a lower US dollar over the long term offshoring/outsourcing will lose its initial value. It will become more cost effective to keep parts of their business in-house, and maintain current employee levels or hire new employees at home. Shareholders, employees, and customers can all be happy with that news.
it is worth pointing out that the dollar is losing value against MOST other worldwide currencies. exceptions are the Japanese Yen and the Chinese Yuan. the sustained weakness (however politically driven rather than economically) of the Yuan does not affect the price of goods bought in China. The biggest drawdown to the falling dollar is the European and American (Canada & Central & South American) trade.
It may not be until a dollar looses another 50% before we see any significant correction of our trade deficit or decline in outsourcing. By then, seems to me, most of us are not going to be doing all that well financially. (Especially considering the comments about oil imports above).
Listened to the story, your guest made it sound real rosey. He is mistaken. Sure some people will benefit-American manufacturers, consultants, economist and even radio talk show host. That the average American will benefit by keeping his/her job. This is bull. What is manufactured here? I have not bought a Boeing 777 or a D5 Cat, lately. Companies are still going to move jobs overseas where labor is still less expensive. You yourself said it you said the new wage of $25/hr. is still cheaper than here. It is going to be a boom for manufacturers who manufacture overseas, add their markup (in $), and export (in $). The things I buy everyday (except food)are not manufactured here. So the prices I pay are going up. Even prices for food is going up as more is exported due to the relatively cheap cost. Look at milk. We all are not as gullible as you and your guest hope.
Having listened to your program, at least 3 questions come to my mind: 1. how is for example british economy differnet from ours to allow for the value of their currency not to fall ? 2. in case we have a reasonable control over the value of our currency, are we trying to compete with china and india to be a competitively cheap labour market ? (good luck with that) 3. where do we think educated people (i.e. scientists who develop new technologies) are going to get a job in the future if let's say they are to be paid 5000 USD or 5000 euros for the same job (which is likely)should the current trend of USD devalvation continue ?
I am an American living in France. My husband, who is still being paid in US dollars, works for a well-known musical instrument manufacturer doing business in Europe. While the company stands to make a hefty profit importing to Europe, we received a firm NO from the boss when a well-deserved raise was requested. Your guest assumes that the windfalls for American manufacturers will trickle down to employees in the form of increased wages. I think it's wishful thinking to assume that greedy American companies will share the wealth. In the meantime, my husband and I continue to travel to luxembourg for our coffee beans!
From the guest's comments, it seems that the average blue collar worker may suffer in the short term, but may benefit in the long term as foreign businesses move their manufacturing operations to the US. I wonder, specifically, what time scales are being implied, and if it will be too little, too late for many US workers.
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