Falling dollar, rising exports

ARTICLE: In Dollar's Fall, Upside for U.S. Exports, By NELSON D. SCHWARTZ, New York Times, October 18, 2009

Good description of what happens with exports when you have a "weak" dollar, per a recent post of mine.

Comments

[Jeff J]

It will be interesting to see the G-20 reaction assuming the dollar stays relatively weak. Will the G-20 strive for the balance they claim to desire by pressing Asian countries to let their currencies float or do they continue to favor a theoretical balance of payments as long as it does not affect them negatively.

[Mike Frager]

The weak dollar is a Sword of Damocles that hangs over the head of the US economy.

Either the Fed. raises rates and causes a real recession and crimps government spending. This would set the stage for real prosperity in the future.

OR....

Oil stops being traded in dollars and the dollar crashes, causing a massive sudden stop to the phony, import-dependent US economy.

A dollar crash, which our current policies are leading us toward, will be the ultimate perturbation of our system.

[Tom Barnett]

As I said in a previous post, this is THE global experiment du jour.

[TEJ]

Mr. Frager

There are certainly more than two possibilities here.

I've always thought it unfortunat that we use 'weak' and 'strong' to describe currencies relative to each other. After all, what politician wants a 'weak dollar'? Even if one desires the effects of a 'weak' currency it is a hard position to argue simply due to its name.