The national trade deficit is the most significant factor affecting the value of our currency internationally. It should be recognized as an important political issue too.
What if foreign buyers who have accumulated dollars decide to buy real or income producing assets, rather than what consumables we can make? We will also feel the impact of foreign entities using our dollars to bid up the cost of energy, food, and other precious commodities internationally as well as potentially within the U.S.
The consequences of a huge trade deficit are also reflected in our own domestic economy as a loss of jobs. I believe the consequence of this ripples through our economy with an impact on credit default rates, and perhaps our very social fabric of values.
I do not want to be so egotistical as to believe that I have a solution to this problem all on my own, but I sincerely hope that America will recognize and begin to address this crucial issue soon.
Discuss
Steven Devijver on January 8, 2008, 9:10 AM
The biggest pressures on the US dollar value is the ongoing shift of wealth to China, the poor performance on the stock market of the US financial sector titles due to the subprime crisis and the shift of investment capital from US assets to energy related assets, notably oil trading.
Btw, the outlooks for the dollar course in 2008 range between $1.35 for 1 EURO to $2 for 1 EURO.
Larry Burgess on January 9, 2008, 11:03 AM
devijvers, the shift of wealth to China is the trade deficit, but I also think that much of our economic woes relate to outsourcing to China and India manufacture of products formerly made in the US. Job loss, has created the credit crunch, which begets a range of problems that drag the stock market down. Accumulated dollars overseas now compete for energy driving this cost up too.
Add a Comment
You must be logged in to comment. Log in or Register