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Impact of a weak US Dollar?

Discussion in 'General Entrepreneur Discussion' started by hakrjak, Nov 8, 2007.

  1. hakrjak
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    hakrjak Bronze Contributor Read Millionaire Fastlane

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    Is anybody else sick of hearing about the impact of the weak US dollar?

    Should a weak dollar boost our exports, and bring more foreign investments into our country?

    Unless you're spending 100% of your dollars overseas, shouldn't this have minimal impact to you and your family!?
     
  2. kimberland
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    kimberland Bronze Contributor

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    I love hearing about it.
    Just bought a car in the U.S.,
    finished my holiday shopping on the weekend,
    paid up my advertising for next year,
    and transferred over some Cdn$'s at 1.10 (nice, very nice).
    Oh, and buying US investments on the OMG Dow days.
    (Playing the lag between the U.S. economy and Canada's)

    It is like the entire U.S. is on sale
    Makes me almost giddy.
     
  3. randallg99
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    randallg99 Bronze Contributor

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    I am very interested in the impact the weaker US$ has on the American economy... we all know how vibrant the global economy is at this time, but how important is that to us (as US citizens/consumers)...

    you are right that foreign investments will increase, but at what and whose expense? Bottom line profits will not be American taxed since the profits are owned by foreign entities... this is only one aspect of a macro impact our country will face as a result of a declining dollar.

    Another large problem with the declining dollar is that it's coming at a time of high gas prices, in the middle of a credit liquidity crisis and a potential housing market meltdown, negative savings rate, a stretched defensive budget, etc... the last thing the consumer needs is a dollar that cannot afford the same luxuries it did only a year ago...

    the velocity alone of the dollar's weakness has incredible ramifications on the economy...

    in summary, the consumer will have a much harder time supporting their standard of living as they have in the past several years as a result of higher cost imported items but the reality is that the US$ will come back one day as all currencies experience long term gyrations.
     
  4. Andrew
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    Andrew Contributor

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    From a basic economics standpoint, more exports, less imports. The wildcard seems to be how other countries will manipulate their currencies in response.

    From a business owner standpoint, this is devastating Canadians being paid in US dollars. Over the past 5 years it amounts to a 60% drop in income. Just the same, Canada's manufacturing exports are hurting as well.

    I am not making any business decisions based on currency values. I have international projects that are being launched, just because of future growth and lack of competition. A weak dollar could become a bonus.

    Personally, I believe the biggest danger here is government intervention. Just take a look at the most recent real estate bubble, cheap & easy credit (thanks to the fed) timed with all kinds of new credit and bankruptcy restrictions, and now possibly rising taxes going into the correction. Pretty typical.

    Bottom line, have income sources from multiple currencies but don't go out of your way and risk your current dollar income in exchange for it. Thats my opinion.
     

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