This may have been true in the past when we had a significant manufacturing base and were not competing against countries where people work for less than 1USD an hour (in the past these countries had the cheap labor but not the mnaufacturing infrastructre but now they have both). Today the stimulus provided by a weak $ to manufacturing employment inside the US is far outweighed in terms of net global economic output by the decrease in economic activity in EM. It is comparative advantage in reverse.
American Dollar and Joe Six Pack
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This may have been true in the past when we had a significant manufacturing base and were not competing against countries where people work for less than 1USD an hour (in the past these countries had the cheap labor but not the mnaufacturing infrastructre but now they have both). Today the stimulus provided by a weak $ to manufacturing employment inside the US is far outweighed in terms of net global economic output by the decrease in economic activity in EM. It is comparative advantage in reverse.
True inflation helps those with debts but only if they have a job and their income keeps up with inflation. Look at Argentina for an example of how currency collapse can be a negative even though it erases debt.
This is only a guess but if you charted prices at Walmart over the last two year sand wages at Walmart I would bet that prices were increasing at a much faster pace than wages. Throw in the resets, the higher oil and food prices and you have the US consumer severley impaired. I doubt the US consumer will be in a position to continue to fuel global growth much longer. True the world is richer and needs the US consumer less than before, but the world is also more leveraged and operating on much thinner margins (the part of the world that makes what we need) than at any time in history so even a small decrease in consumption can have a much marger effect than in the past.
Even heard Maxine Waters speak?
And yet they have figured out that whatever the dollar value is, they don't have any real influence on the outcome. Self appointed intellectual elitists like yourself actually believe your opinion means something, when in fact your opinion has no more meaning than the ramblings of a bum on the street.
What most people don't want to face is, that in the bigger picture there are very few power brokers in the world, and to those few, the rest of us are all "Joe sixpacks", regardless of the six figure, chump change income we think impressive.
What manufacturing is even left in this country???? US luxury cars are selling well in china but plants in MI still closing. there is virtually no clothing manufacturing done here anymore. Small amount of boots and shoes are made here. We do have quite a dilema or conundrum......we need to make dilemonade
When Bernanke was asked about the weak $ and the feds policy of keeping it strong, all Bernanke could say was that in his opinion it was strong within America and the people could continue to buy the same amount of goods. That was what a strong $ meant to him. Seemed like a pretty narrow view in my opinion.