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A weaker dollar is marketed as a bad thing in the USA. But many don't realize that a strong dollar benefits the rich and a weak dollar benefits entrepreneurs an

A weaker dollar is marketed as a bad thing in the USA. But many don't realize that a strong dollar benefits the rich and a weak dollar benefits entrepreneurs and companies who don't yet have large dollar reserves they need to protect, but are exporting services and competing in a global market place.

larrykubin 16y ago
The majority of the population aren't the rich people with tons of money in the bank or entrepreneurs starting companies. The price of gas and basic food items increasing rapidly is devastating to many people.
- nika 16y ago
  One could, in fact, call it a regressive form of taxation.
- mmaunder 16y ago
  Then you have to consider what is more devastating: Being unemployed because your job was shipped to a country with a weaker currency, or being employed but paying more for imported goods because our currency is weakened. A weak dollar will create more jobs in the USA as it becomes more expensive for companies to outsource to other countries. In the short term, imported goods will increase in price, but longer term they will readjust to levels that reflect their real value as production moves back on-shore.
  - richcollins 16y ago
    Worked like a charm in Zimbabwe
  - jellicle 16y ago
    You say that as if it was possible to move 25% of the world's oil production to the United States.
- orijing 16y ago
  Exactly, and the weakening dollar is making food, gas, etc more expensive to the poor in the US. The strong dollar is especially beneficial to the consumers.
nika 16y ago
You're looking at tertiary effects and missing the first order effects that are much stronger. Everyone needs capital, and whether your net worth is $1 or $1B, you need that capital to live. If you're starting a business you still need that capital- whether it is $10k from your grandmother or $10M from your VC who has $10B under management. "Strong" and "weak" are terms used to discuss the dollar in the context of other countries currencies. The policies of those other countries affect half of the equation there and are out of our control. Monetary inflation is bad for everyone, rich and poor, except for government. It is a mechanism whereby the government taxes everyone without most people recognizing it. The fears of "deflation" are propagated by government to let them get away with inflation. But they are in error. They describe economic collapse as "deflation" but you can have an economic downward spiral in a high-inflation environment (what we had in the great depression, the 1970s and what zimbabwe experienced.) Without regard to the value of the underlying currency, people can lower prices because there is collapsing demand. This is more likely when the currency is rapidly losing value and people focus on buying necessities rather than other items in the economy. Monetary deflation, historically, produced a more robust economy, moved the USA from third world status to first world status in a rapid period and was well on its way to ending poverty in the country when the inflationists managed to gain political power and end the ascent of the country. Unfortunately they also control the schools and the "economics" education, and thus most of the populace doesn't understand the nature of money, let alone grasps inflation.
omouse 16y ago
How does it benefit regular folks who aren't part of the boss class? :-|
- pessimizer 16y ago
  It becomes easier to pay off your debts, which won't rise in response to the unexpected inflation like your wages will.
  - triviatise 16y ago
    fixed rate debt. Your credit card debt will kill you.
orijing 16y ago
A strong dollar doesn't necessarily benefit the rich because the rich have very mobile assets, and it's likely diversified/spread over many regions like Britain, Russia, China, etc. Additionally, most of their assets are in equities whose values depend heavily on whether they're on the importer or exporter side of things. So unless the "rich" you're talking about hold exclusively cash or in export-oriented businesses in the US, no, the rich don't necessarily benefit from a strong dollar. But a strong dollar for sure benefits consumers (in their consumer roles) because they have access to cheaper goods. It also benefits businesses that import more goods from abroad than they export--so Walmart, for instance. "Consumer" means all of us in the US. A strong dollar is good for my pockets.

larrykubin 16y ago

The majority of the population aren't the rich people with tons of money in the bank or entrepreneurs starting companies. The price of gas and basic food items increasing rapidly is devastating to many people.

nika 16y ago
One could, in fact, call it a regressive form of taxation.
mmaunder 16y ago
Then you have to consider what is more devastating: Being unemployed because your job was shipped to a country with a weaker currency, or being employed but paying more for imported goods because our currency is weakened. A weak dollar will create more jobs in the USA as it becomes more expensive for companies to outsource to other countries. In the short term, imported goods will increase in price, but longer term they will readjust to levels that reflect their real value as production moves back on-shore.
- richcollins 16y ago
  Worked like a charm in Zimbabwe
- jellicle 16y ago
  You say that as if it was possible to move 25% of the world's oil production to the United States.
orijing 16y ago
Exactly, and the weakening dollar is making food, gas, etc more expensive to the poor in the US. The strong dollar is especially beneficial to the consumers.

nika 16y ago

You're looking at tertiary effects and missing the first order effects that are much stronger. Everyone needs capital, and whether your net worth is $1 or $1B, you need that capital to live. If you're starting a business you still need that capital- whether it is $10k from your grandmother or $10M from your VC who has $10B under management. "Strong" and "weak" are terms used to discuss the dollar in the context of other countries currencies. The policies of those other countries affect half of the equation there and are out of our control. Monetary inflation is bad for everyone, rich and poor, except for government. It is a mechanism whereby the government taxes everyone without most people recognizing it. The fears of "deflation" are propagated by government to let them get away with inflation. But they are in error. They describe economic collapse as "deflation" but you can have an economic downward spiral in a high-inflation environment (what we had in the great depression, the 1970s and what zimbabwe experienced.) Without regard to the value of the underlying currency, people can lower prices because there is collapsing demand. This is more likely when the currency is rapidly losing value and people focus on buying necessities rather than other items in the economy. Monetary deflation, historically, produced a more robust economy, moved the USA from third world status to first world status in a rapid period and was well on its way to ending poverty in the country when the inflationists managed to gain political power and end the ascent of the country. Unfortunately they also control the schools and the "economics" education, and thus most of the populace doesn't understand the nature of money, let alone grasps inflation.

omouse 16y ago

How does it benefit regular folks who aren't part of the boss class? :-|

pessimizer 16y ago
It becomes easier to pay off your debts, which won't rise in response to the unexpected inflation like your wages will.
- triviatise 16y ago
  fixed rate debt. Your credit card debt will kill you.

orijing 16y ago

A strong dollar doesn't necessarily benefit the rich because the rich have very mobile assets, and it's likely diversified/spread over many regions like Britain, Russia, China, etc. Additionally, most of their assets are in equities whose values depend heavily on whether they're on the importer or exporter side of things. So unless the "rich" you're talking about hold exclusively cash or in export-oriented businesses in the US, no, the rich don't necessarily benefit from a strong dollar. But a strong dollar for sure benefits consumers (in their consumer roles) because they have access to cheaper goods. It also benefits businesses that import more goods from abroad than they export--so Walmart, for instance. "Consumer" means all of us in the US. A strong dollar is good for my pockets.