Who says the value of the dollar doesn't matter?
The Bush administration and the Federal Reserve act as though the declining dollar is not a real issue. They keep reducing interest rates which has caused the dollar to reach all time lows.
Unfortunately, the declining dollar has had and continues to have a major impact on all Americans.
First of all it has contributed to the unprecedented rise of oil prices ($100 p;us) since the oil producing nations sell their output in dollars. So as the dollar declines OPEC raises prices, even though demand has declined and supply is about normal. This has caused a significant rise in the prices of everything and is causing high inflation.
Second, it has enabled countries, like Dubai and China, to purchase American companies and assets are bargain prices. In fact, you might say that they own the United States since they have enormous amounts of dollars and have a very favorable balance of trade.
Third, tourists from Europe, Mid East and Far East are able to come to the United States on special shopping tours to purchase products are bargain levels, while US citizens who wish to travel to these parts of the world can't afford it.
Of course the retort is that the United States exports increase. The porblem is that we really don't make much in the country to benefit from this growth and to create jobs and enhance the wealth of Americans.
It appears that the new Federal Reserve Chairman is doing everything to save those who created the sub-prime mess and are allowing the country's assets to decline and inflation to increase aggressively. Why are they ignoring this issue and making decisions, like continuing to reduce interest rates, which makes the value of the dollar lower and hurts all of those on fixed incomes?
We need sound long term economic strategies and policies and not just politically expedient short term fixes.
Bill Rothschild, CEO Rothschild Strategies Unlimited LLC, author of "The Secret to GE's Success".
Unfortunately, the declining dollar has had and continues to have a major impact on all Americans.
First of all it has contributed to the unprecedented rise of oil prices ($100 p;us) since the oil producing nations sell their output in dollars. So as the dollar declines OPEC raises prices, even though demand has declined and supply is about normal. This has caused a significant rise in the prices of everything and is causing high inflation.
Second, it has enabled countries, like Dubai and China, to purchase American companies and assets are bargain prices. In fact, you might say that they own the United States since they have enormous amounts of dollars and have a very favorable balance of trade.
Third, tourists from Europe, Mid East and Far East are able to come to the United States on special shopping tours to purchase products are bargain levels, while US citizens who wish to travel to these parts of the world can't afford it.
Of course the retort is that the United States exports increase. The porblem is that we really don't make much in the country to benefit from this growth and to create jobs and enhance the wealth of Americans.
It appears that the new Federal Reserve Chairman is doing everything to save those who created the sub-prime mess and are allowing the country's assets to decline and inflation to increase aggressively. Why are they ignoring this issue and making decisions, like continuing to reduce interest rates, which makes the value of the dollar lower and hurts all of those on fixed incomes?
We need sound long term economic strategies and policies and not just politically expedient short term fixes.
Bill Rothschild, CEO Rothschild Strategies Unlimited LLC, author of "The Secret to GE's Success".
posted by TheStrategist @ 4:07 PM
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