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#1 |
I am Freddie/UNDERCOVER/ Founder of The Great Continent of Entmoot
Join Date: Dec 2001
Location: Plainsboro, NJ
Posts: 9,431
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Strong Dollar vs Weak Dollar
I was thinking of starting this thread for a while becuase of our huge trade deficit, the rising Euro, etc.
I was wondering what people thought was better - a strong dollar or a weak dollar. The dollar hit a historic low against the Euro today. This is AFTER Bush reiterated his policy of a strong dollar. Now a weak dollar makes our products easier to sell overseas, but makes imported products more expensive here (one of the reasons for our huge trade deficit). Now also - a weak dollar discourages international investment into our stock exchanges (NASDAQ, NYSE, etc). A strong and stable dollar is what makes the US dollar the world's currency. This in itself brings a lot of benefits. Russia is currently supposedly dumping dollars and replacing them with Euros and a strong dollar shows confidence in the US. Now which is better for America? I think the strong and stable dollar is in the long run. I think the world's currency and the benefits it brings to the stock market outweigh the trade deficit, just as long as the trade deficit just doesn't get out of control. If anyone has any information on how the currency rates affect various aspects of the economy - that would be great to post. I tried finding a website to explain this, but I wasn't able to.
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#2 |
the dumb stoner canuck
Join Date: Feb 2003
Location: canada
Posts: 2,542
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when i saw this i thoughtyou meant like american dollar vs canadian dollar
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-"Down with the system"-Serj tankian of system of a down -“Humans have been on the earth for millions of years, yet we don’t believe man began thinking until he started building walls. And what good have these walls ever done us?”-Serj tankian of soad -"stupid people do stupid things"-Serj tankian of soad "Trying is the first step to failure" Homer Simpson "It isn't going to be easy"-jerseydevil "only the good die young" I AM CANADIAN If the people lead, the leaders will follow. |
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#3 | |
I am Freddie/UNDERCOVER/ Founder of The Great Continent of Entmoot
Join Date: Dec 2001
Location: Plainsboro, NJ
Posts: 9,431
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Quote:
Going to Canada is VERY cheap for Americans though. ![]()
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Come back! Come back! To Mordor we will take you! "The only thing better than a great plan is implementing a great plan" - JerseyDevil "If everyone agreed with me all the time, everything would be just fine"- JerseyDevil AboutNewJersey.com New Jersey MessageBoard Another Tolkien Forum Memorial to the Twin Towers New Jersey Map Fellowship of the Messageboard Legend of the Jersey Devil Support New Jersey's Liberty Tower Peacefire.org AboutNewJersey.com - New Jersey Travel and Tourism Guide |
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#4 | |
the dumb stoner canuck
Join Date: Feb 2003
Location: canada
Posts: 2,542
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Quote:
well dont worry were not a competitor less we legalize weed maybe. ![]()
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-"Down with the system"-Serj tankian of system of a down -“Humans have been on the earth for millions of years, yet we don’t believe man began thinking until he started building walls. And what good have these walls ever done us?”-Serj tankian of soad -"stupid people do stupid things"-Serj tankian of soad "Trying is the first step to failure" Homer Simpson "It isn't going to be easy"-jerseydevil "only the good die young" I AM CANADIAN If the people lead, the leaders will follow. |
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#5 |
Hoplite Nomad
Join Date: Sep 2001
Posts: 3,931
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Good topic but I have to admit I am currently quite ignorant of the topic. I have a few economic books I plan on reading in the new year. Maybe then I can add some worth while comments.
I can say I like a weak Yen. Since I am paid in yen the lower it goes the more US money I get in exchange.
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About Eowyn, Does anyone know what her alias Dernhelm means? She was kown as dernhelm because of her exclaimation when she realized that the rider's headgear was heavy and obscured her sight. 'Dern Helm" Culled from Entmoot From Kirinski 57 and Wayfarer. Last edited by afro-elf : 12-16-2003 at 01:43 AM. |
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#6 | |
I am Freddie/UNDERCOVER/ Founder of The Great Continent of Entmoot
Join Date: Dec 2001
Location: Plainsboro, NJ
Posts: 9,431
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Quote:
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Come back! Come back! To Mordor we will take you! "The only thing better than a great plan is implementing a great plan" - JerseyDevil "If everyone agreed with me all the time, everything would be just fine"- JerseyDevil AboutNewJersey.com New Jersey MessageBoard Another Tolkien Forum Memorial to the Twin Towers New Jersey Map Fellowship of the Messageboard Legend of the Jersey Devil Support New Jersey's Liberty Tower Peacefire.org AboutNewJersey.com - New Jersey Travel and Tourism Guide |
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#7 | |
Cyber Elf Lord
Join Date: Sep 2001
Location: Left of Rock, Right of Hard Place
Posts: 986
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Re: Strong Dollar vs Weak Dollar
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I think in the short term, a "weak" dollar has the benefits you mentioned: It is cheaper for American products to be sold overseas. and Foreign products are more expensive to similar US products in the USA. Encourages tourism in USA since foreign money goes further. and conversely discourages US tourism abroad since US dollar is worth less than foreign currencies. For the Long term, I think a strong dollar is better for the US. (Foreign investment in US markets, US remains influencial among international circles, US dollar is used as a "de facto currency" which leads to people holding US currency. This has the effect of giving the US government an interest free loan.) This is a little off topic, but I think that balanced trade among the world nations is better for everyone. It is not good for the collective world to depend on a few (or one) nations to buy their products without reciprocal buying. (not necessarily the same products) If Hypothetically the US stopped buying foriegn products, it could lead to severe world wide economic consequenses. I am not sure that I can explain it adequately, but basically all national economies are linked to one another. If one economy suffers it affects the other world economies.
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Sincerely, Anthony 'Many are my names in many countries,' he said. 'Mithrandir among the Elves, Tharkûn to the Drarves; Olórin I was in my youth in the West that is forgotten, in the South Incánus, in the North Gandalf; to the East I go not.' Faramir What nobler employment, or more valuable to the state, than that of the man who instructs the rising generation? Cicero (106BC-43BC) |
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#8 | |
Hoplite Nomad
Join Date: Sep 2001
Posts: 3,931
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Sorry, you to have failed you Darth Freddie. When I was in Saudi the Riyal was always 3.75 for 3 years. Here in Japan the yen is up and down. Actually that is why I bought those ecomonic books so I could learn some more. As a related but still off topic note. I can pay off my WHOPPING school loan in under three years and then I am looking into some investing and semi-retirement in about in about 5-7 years. The key word there being SEMI
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About Eowyn, Does anyone know what her alias Dernhelm means? She was kown as dernhelm because of her exclaimation when she realized that the rider's headgear was heavy and obscured her sight. 'Dern Helm" Culled from Entmoot From Kirinski 57 and Wayfarer. |
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#9 | |
I am Freddie/UNDERCOVER/ Founder of The Great Continent of Entmoot
Join Date: Dec 2001
Location: Plainsboro, NJ
Posts: 9,431
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I did find a currency blog that discusses the US dolar in relation to other currencies and it's role.
For instance... Quote:
Oh - and A-E - you must PAY for your failure.
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Come back! Come back! To Mordor we will take you! "The only thing better than a great plan is implementing a great plan" - JerseyDevil "If everyone agreed with me all the time, everything would be just fine"- JerseyDevil AboutNewJersey.com New Jersey MessageBoard Another Tolkien Forum Memorial to the Twin Towers New Jersey Map Fellowship of the Messageboard Legend of the Jersey Devil Support New Jersey's Liberty Tower Peacefire.org AboutNewJersey.com - New Jersey Travel and Tourism Guide Last edited by jerseydevil : 12-16-2003 at 02:07 AM. |
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#10 |
im quite stupid
Join Date: Feb 2002
Location: Cockermouth
Posts: 2,058
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I dont pretend to understand the sulties of money etc but from what i can make out its good to have neither a strong or week dollar but what seem to be the aim is to have a balancled
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#11 |
Cyber Elf Lord
Join Date: Sep 2001
Location: Left of Rock, Right of Hard Place
Posts: 986
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Your question has me thinking more about the strong and weak dollar.
Here are some links: econedlink StrongDollar Mises Tracking the U.S. Dollar By William Poole Single-minded This makes me think that the reasons why a currency (in this case the US dollar) is relatively Strong or Weak are important to consider when deciding if a Weak or Strong dollar is good or bad. I generally consider that when the US economy is strong the US dollar is strong as well. This is not always true. I think that Sween is closer to the mark. The must be a balance. (Now we need to figure where that balance is located. ![]()
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Sincerely, Anthony 'Many are my names in many countries,' he said. 'Mithrandir among the Elves, Tharkûn to the Drarves; Olórin I was in my youth in the West that is forgotten, in the South Incánus, in the North Gandalf; to the East I go not.' Faramir What nobler employment, or more valuable to the state, than that of the man who instructs the rising generation? Cicero (106BC-43BC) |
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#12 | ||||
I am Freddie/UNDERCOVER/ Founder of The Great Continent of Entmoot
Join Date: Dec 2001
Location: Plainsboro, NJ
Posts: 9,431
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#13 | ||
Co-President of Entmoot
Super Moderator Join Date: Aug 2002
Location: Canada
Posts: 8,397
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I took a 1st year Economics class last year, let's see what I can remember. (Not that I claim to be an expert on the subject...
![]() Neither a moderately strong or weak dollar is negative. If the dollar is too strong, no one will buy anything in the country, and the dollar will come down to a more moderate value. (People will then resume importing from the country.) Having a moderately low dollar is okay, because your exports will increase and your imports will decrease. This usually results in your dollar increasing in value. I think this is because more money coming in to the country than going out increases the GDP (Gross National Product). Having a moderately high dollar does the opposite - greater exports than imports eventually lower the value of the dollar. Having an extremely low dollar is very negative. Someone pointed out that this leads to instablity because no one will invest in the country. This leads to a dollar that says low and is nearly worthless. I think that's caused by an Inflation Spiral, where the prices of goods continue to rise so that the real value of the dollar is very low. Great thread JD! It really got me thinking.
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"I can add some more, if you'd like it. Calling your Chief Names, Wishing to Punch his Pimply Face, and Thinking you Shirriffs look a lot of Tom-fools." - Sam Gamgee, p. 340, Return of the King Quote:
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#14 |
Cyber Elf Lord
Join Date: Sep 2001
Location: Left of Rock, Right of Hard Place
Posts: 986
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Gold Is Freedom
Some more articles on strong weak currency and some articles on the gold standard.
Ironically, it seems that the more I look into the pluses/minuses of a (strong/weak) currency the more questions I find. ![]() White House's Dollar Dilemma: Weak Currency Helps Economy MICHAEL M. PHILLIPS and MICHAEL R. SESIT / Wall Street Journal 13may03 http://www.mindfully.org/Reform/2003...oss13may03.htm Strong Dollar, Weak Dollar: Anyone Have a Scorecard? By Edmund L. Andrews New York Times September 24, 2003 http://www.globalpolicy.org/socecon/...weakdollar.htm Corporate Crisis and Bubble Capitalism http://www.globalpolicy.org/socecon/...ex.htm#deficit The Value of Currencies http://www.fxdd.com/fxddtutor_6_4.htm Gold is Freedom http://www.goldisfreedom.com/default.htm Euro Inflation The Inflationary Euro by Jeffrey M. Herbener http://www.mises.org/fullarticle.asp?record=124&month=4 A GOLD POLARIS by Jude Wanniski http://www.polyconomics.com/searchbase/gp1.htm What Has Government Done to Our Money? Murray N. Rothbard http://www.mises.org/money/4s1.asp Gold Standard vs. Fiat Money http://economics.about.com/cs/money/...standard_2.htm
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Sincerely, Anthony 'Many are my names in many countries,' he said. 'Mithrandir among the Elves, Tharkûn to the Drarves; Olórin I was in my youth in the West that is forgotten, in the South Incánus, in the North Gandalf; to the East I go not.' Faramir What nobler employment, or more valuable to the state, than that of the man who instructs the rising generation? Cicero (106BC-43BC) Last edited by mithrand1r : 12-18-2003 at 02:15 AM. |
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#15 | |
I am Freddie/UNDERCOVER/ Founder of The Great Continent of Entmoot
Join Date: Dec 2001
Location: Plainsboro, NJ
Posts: 9,431
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here was this article on CNN.com about the upcoming G7 conference...
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Come back! Come back! To Mordor we will take you! "The only thing better than a great plan is implementing a great plan" - JerseyDevil "If everyone agreed with me all the time, everything would be just fine"- JerseyDevil AboutNewJersey.com New Jersey MessageBoard Another Tolkien Forum Memorial to the Twin Towers New Jersey Map Fellowship of the Messageboard Legend of the Jersey Devil Support New Jersey's Liberty Tower Peacefire.org AboutNewJersey.com - New Jersey Travel and Tourism Guide |
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#16 |
Dúnedain Ranger of the North
Join Date: Aug 2000
Location: The Ruins of Arnor
Posts: 892
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I think we have set new redcords in the Dollar vs Euro this year.
A dollar should still be on the bi-metal standard and worth 1/20th of an ounce of gold or 1 ounce of silver. But these days what a dollar, or a Euro for that matter is worth depends on people's confidence in it as there are not any real reserves to back them.
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#17 | ||
Co-President of Entmoot
Super Moderator Join Date: Aug 2002
Location: Canada
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But the value of gold also fluctuates. So really, the value of any currency (even if it's used in the most general sense as any medium of exchange) is relative.
Whether you want a relatively strong or weak dollar compared to your trading partners, say, depends on whether or not you import or export more. In British Columbia we don't really mind a weak dollar for two reasons. One, we export a lot of wood products to the USA, and the forest industry is our largest industry. Our second largest industry is tourism, so the more Americans that visit us the better. ![]()
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"I can add some more, if you'd like it. Calling your Chief Names, Wishing to Punch his Pimply Face, and Thinking you Shirriffs look a lot of Tom-fools." - Sam Gamgee, p. 340, Return of the King Quote:
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#18 |
Dúnedain Ranger of the North
Join Date: Aug 2000
Location: The Ruins of Arnor
Posts: 892
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The dollar value of gold only fluctuates because the dollar is not tied to it in a gold standard. From 1933 to 1972, a U.S. dollar was worth 1/35th of an ounce of gold. From 1792 to 1933 it was worth 1/20 of an ounce of gold. The dollar was backed by the precious metal and could be redeemed for gold or silver at the Federal Reserve bank. Here is a summary of money history.
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