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Keepongoing
Joined: 13 Feb 2003
Location: Korea
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Cheonmunka
Joined: 04 Jun 2004
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 Posted: Tue Oct 09, 2007 2:59 pm Post subject: |
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| There certainly are some growing economies that have surplusses whereas US has a huge debt. A bit of belt tightening would be a welcome fix. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Tue Oct 09, 2007 3:40 pm Post subject: |
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A low dollar would make oil expensive. That would be bad, but then it would drive further development in alternative energy. There would be a long term good. American auto makers would take it in the ass, however. People would buy small foreign cars.
A low dollar would mean American exports are more competitive. The tourism industry would take off, as Europeans and Canadians flood in. The strong Canadian dollar is already causing huge back ups at the border as Canadians head south (or north in the case of Windsor/Detroit) to shop at Wal-Mart.
If the dollar looks like it's about to collapse, nations with large amounts of American currency like China and Japan would go on a shopping spree, investing in American property and stocks. All the money would come back very quickly and lots of property owners and stock holders would get richer quickly.
In anything in economics, some people lose, some people win. So if you make Harleys or live around Disney World, fantastic. If you make Ford cars, not so good. |
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Fresh Prince
Joined: 05 Dec 2006
Location: The glorious nation of Korea
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| Posted: Tue Oct 09, 2007 7:54 pm Post subject: |
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| The current account deficit of the United States translates into current account surplus of exporting countries. To cover this deficit, US borrows: this corresponds to the forex reserves of exporting countries. The crux of the issue is that no other country, barring the US, has such a huge consumption pattern and an ability to absorb this huge export surplus. |
The highlighted portion is misleading: The author implies that the U.S. is borrowing to cover the current account deficit when the current account and the borrowing that the author is referring to, are inversely related economically. An increase in borrowing must result in a decrease on the other side of the equation. |
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blackbird
Joined: 28 Apr 2003
Location: Songtan
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endo
Joined: 14 Mar 2004
Location: Seoul...my home
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| Posted: Tue Oct 09, 2007 8:42 pm Post subject: |
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| Is Keepongoing, Stevie McGarette's sock? What in the hell! |
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