This is another soap box rant of mine, hopefully some of you will agree.
The Government tries to convince us all that the at low US Dollar is good for the economy. While it may be for SOME. I am not so sure it is good for the countries consumers and hense us ER's. Is it only me that thinks this, or is this just another government spin? Just to justify their mismanagement of Government funds (Our Taxes), whether it be military spending or $500 hammers, or the deficit(s).
I have tried and tried to understand this theory, but EVERYTHING I can think of, at the consumer level is affected to the adverse by the low dollar.
The US Imports at least some major parts of most items produced either, in the USA or Off-Shore. And by the way tons of STUFF is made Off-Shore by US Companies. So even if you get all patriotic and commit to buy American, you really aren't. Check this out..
Click on List of companies exporting jobs
there are thousands! I know this is based on jobs, but it also indicates stuff is being made Off-Shore and Re-Imported.
So by default we will be paying more for everything even if it is actually made in the US because of the low Dollar. The fact that most consumer items contain parts from overseas, mandates it.
Computers - Parts mostly made in China no matter what badge is on them.
Cars - The Electronic parts are all manufactured overseas in most cases.
Consumer Electronics - The Americans could not make a good Stereo system or TV if they tried. Just look at the quality of a Zenith TV in comparison to a Sony or Mitsubishi. Physically as well as technically. And I bet even their parts come from China in the end.
Appliances - Most Electronic parts come from overseas.
These are but a few.
Now the big one that is hurting us NOW! Unless you are selling and not re-purchasing, Housing. With the UK pound being $1.8 US Plus and the Euro being $1.2 Plus, don't you think that this has something to do with the recent massive increase in house prices in desirable areas?
Funny how house prices started to increase almost immediately after the US Dollar started to fall dramatically, about 1 - 2 years ago, but mostly in the last year. Some of this increase is for sure also attributed to interest rates, but when you reduce interest rates the currency falls as people sell it for more favorable returns on cash in other countries. And this also attracts foreign buyers of REAL Property.
Look at Australia (5%+ in Savings Accounts) and the UK (4% + in Savings accounts). If you had a choice of where to put your hard money would you put it in a US CD at $2.x%? This in turn reduces the value of the currency along with the other factors mentioned.
Soooooo.... why doesn't the government make an effort to reduce the deficit and the national debt, and bolstering the US dollar, which in turn will encourage investment in US Debt and hense give the government more cash? Duh!
At the rate they are going, soon the US Dollar will no longer be the currency of choice, it will be the Euro. Which by the way is exactly what the European Community wants, including France and Germany. So instead of punishing them for not supporting the US in Iraq, they will be rewarded. Currently their consumers are being rewarded with cheaper houses and consumer goods puchased from America. Ever looked at housing costs in Europe? Makes you think twice about the housing boom, doesn't it?
By the way, this is just my opion, I could be wrong.
Off Soap Box.