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If the US devalues its currency, yes that does make American exports more attractive. However, the way the global financial system works with the dollar as its
by poopypoopington 6y ago
If the US devalues its currency, yes that does make American exports more attractive. However, the way the global financial system works with the dollar as its core, the Americans basically need to constantly serve as an importing nation, buying German BMWs and Chinese laptops so that the rest of the world has a fresh supply of dollars. Thus the dollar needs to be relatively stronger than these exporting countries' currencies to make sure the global financial system isn't starved of dollars. It's honestly an enviable position that the United States is in, because they can borrow money essentially for free (the 10 year treasury bond yield is 1.69% and inflation in 2021 was about 1.7%). So basically the US supplies the world with the dollars it needs to conduct global trade, and in return it can borrow for free from creditors.
- pjmorris 6y ago> So basically the US supplies the world with the dollars it needs to conduct global trade, and in return it can borrow for free from creditors. ... and the US receives hard goods in exchange for that paper/credit.