Monday, January 4, 2010

Benefits of the Declining Dollar

In Sunday's Cincinnati Enquirer, I argue that:
In recent months, the value of the U.S. dollar has resumed the downward trend it was on prior to a big, but short-lived, spike in the financial panic last fall and winter. The falling dollar has been fodder for critics of the administration and Federal Reserve. While a "weak" dollar sounds like a bad thing, it just may help put the US economy on a more solid footing.
We sent that to them a while back, when the falling dollar was in the news. Of course, its strengthened a bit since then since then. At least they didn't print my e-mail address this time, so I haven't received any irate e-mails from the good people of Cincinnati. However, a comment on the Enquirer's website expressed one of the drawbacks:
Mr. Craighead, the seniors who will be drooling into the burgers they are flipping due to greatly reduced retirement savings can't wait for your lower-worth dollar. Maybe we can vacation at Branson and drink cheap beer with box-made grits instead of steak-frites avecvin de maison en France. Only an academic could intellectualize the disintingration of hard-earned wealth and quality of life with such eloquent assurance. Truth is, a weak dollar robs people of what they own and only helps those in a position to profit from others' misery: issuers of bonds, insurance companies, fastfood chains, etc. You teach this?
While I did mention in the piece that there is a downside for consumers, I think it is relatively modest... Overall, I suspect most people would rather be employed and drinking domestic beer than unemployed and borrowing to pay for Lowenbrau.

2 comments:

Anonymous said...

Correctly your article helped me truly much in my college assignment. Hats afar to you post, wish look ahead in the direction of more interdependent articles soon as its united of my pick question to read.

Anonymous said...

Sorry for my bad english. Thank you so much for your good post. Your post helped me in my college assignment, If you can provide me more details please email me.