There has been the suggestion that the US monetary powers that be are in fact weakening the dollar on purpose of competitive advantage on the export side. They point to certain Asian countires who did in fact weaken their own currency by stockpiling other currencies as reserve currencies which they inturn gained a competitive position on export prices and thus advantage in that market.
Problem in doing this is the effect on the domestic capital markets which rolls down hill to the average debt borrower. The short term effects can be horrific with a payoff in the longterm. Or, the average little guy gets squeezed while the big guy gets market leverage. When good times roll again, the little guy is working to rebound what he lost while the big guy makes out like a bandit! This is the kind of things you get when you have a centralized, regulated monetary and business market (Capitialism) instead of an open free market based on Laissez-faire economic ideals.
Ironically Presidental hopeful Ron Paul wrote a weekly piece with connection to this subject back in Jan. of this year.
I was searching the Drudge archives for earlier this week on articles about the book by Scott McClellan that exposed more goings on in the Bush WH concerning the Plame event. I ran across a headline that struck me funny but it does have an economic connection in a humorous kind of way so here goes a funny with a serious underpoint to it.
Call Congress into Session! Have the President issue an Emergency Special Order! Have the Federal Reserve take up the matter! Where is the Interstate Commerce Commission or the FCC? We need immediate action now!
OK, it's meant to be funny but here's where it becomes a serious issue.
Instead of impacting a few million people, what if this situation impacted 50 to 75 million? Would we hear hues and cries from Capital Hill and the White House then? Sure we laugh and I wouldn't cry a drop if this industry disappeared altogether but put another industry in it's place or add people or better yet add better connected people and then what happens? We all would scream bloody murder if the gov't stepped in to save this industry but the scary part is the precedence to do so has been set many times over by the federal gov't. The only difference in this case is not having enough voices to either make a majority or to create an effective special interest that keeps that very thing from happening.
Is that in itself a marked ideal and principle expressed from a free market Laissez-faire economic system?
Its bizzare what such a small difference in the US and Canuck dollar has done.Canadians are flocking to the US to shop and they are finding that cars,tv's'and most electronic items were significantly cheaper in the first place.I read that thousands of people have gone so far as to buy a car in the USA,and even after the duty,sales tax and gst,it is often $2000 cheaper! The emissions controls are different here and with some models they need to be retrofitted to our standards.I went into a hallmark store last week and a sign said, "American prices in effect"
So on the back of a card it says $2.29 US and $3.99 Canadian...thats a major difference!I really don't have a clue about the economic implications of the whole thing,but I get the impression that the gouging has been going on a long time here,and I'm sure,that the US can only benefit from us doing our business there instead of here.
Yes americans will benefit, but really only in cities bordering Canada, places like buffalo, detroit, seattle. Places in the souther region will not benefit mostly from it just because canadians wont travel to texas for a shirt, but hey im from buffalo, lets see how low it can go! just kidding too low isn't good