|
||||||
|
The Declining Dollar
By Elaine Grant on Thursday, November 5, 2009.
The US Dollar has been losing value compared to other currencies around the world. On one hand, the dollar’s decline makes it cheaper for other countries to buy American goods and services. But it also makes it more expensive to import many important consumer products, especially when it comes to energy. We’ll look at what’s making the dollar dip, where US currency fits in an increasingly globalized economy, and what it all means for Granite Staters.
Guests
- Matthew Slaughter, Professor of International Economics at the Tuck School of Business at Dartmouth
- Peter Goodman, national economics correspondent for the New York Times and author of Past Due: The End of Easy Money and the Renewal of the American Economy
Delicious
Digg
Reddit
Facebook
Google
Yahoocomments
All comments are moderated before appearing on the site. Comments must adhere to the NHPR.org comment guidelines and terms of use.
What is the effect of US dollar being used as a common or central currency?
The dollar is used as payment for say goods between non-US countries. Indonesia can buy raw materials from Angola with US dollars. America gains a subsidy from this activity, because both countries agree that dollras are more valueable "common", for this transaction.
Americas Federal Reserve bank in effect is in the banking bussiness. Our ability to manufacture goods and services is less important because internationally transactions are done in dollars. We live off the cream of that activity. In the eyes of the world the dollar remains shiny and so desirable.
Strong Dollar means, American manufactured goods do not compete as well with less expensive foreign manufatured goods. American jobs decrease, our own economic output drops. American currency is still used as a common medium of exchange. We can still borrow because our currency is shinny desirable.
However American workers are expected to fuel via consumption, world wide economic system. Although their wages do not rise at a rate to support the desired growth in the world wide economic system. They can borrow though.
Where does this take us?