Thursday, August 18, 2011

The Fall of the Dollar--Wasn't That Supposed to be a Good Thing?

I know there is no intrinsic merit to s falling dollar: a dollar is a price and prices go up, prices go down. As a fairly compulsive tourist, I admit I don't like having to suck it up a bit more every time I travel with my passport: I loved those 85-cent Euros we played with back in 2001. As an investor I'm so sorry I wasn't more international-diversified. And I certainly think it is silly for Republicans to complain about dollar slippage now--now, about s slippage that has been going on for years.

But wait--isn't thee falling dollar supposed to make our exports cheaper and so goose up native industries? And, for that matter, make imports more expensive--just generally, to induce the greater export of goods and the lesser import of cash?

Think about it.

So, where would we have been had the dollar not fallen?

Dr. Pangloss said that this is the best of all possible worlds. Maybe Dr. Pangloss was a pessimist.

1 comment:

Able said...

As a holder of substantial personal debt, devaluing the dollar isn't as good as plain ol' inflation, but ought to do me some good. --Aaron.