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Reply #2: Just like the US has been demanding China increase its dollar,
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Wed Mar-22-06 02:07 AM
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2. Just like the US has been demanding China increase its dollar, |
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so too a drop in the US dollar will help US productivity. Help it perhaps not loose so many jobs to overseas.
Don't forget too that the rich have had a good 4 years of tax cuts. And the ability to place that money in oversease investment through stocks and the like. And stocks are not affected by dollar as much. Especially those bought in outside markets. But something like Microsoft is not going to loose money on the whole - as they depend on growth oversease for profit. Might even make them more competative - and hook the next generation of Asian middle class into microsoft products for life.
A high dollar can really turn off local industry and hurt local productivity. Germany is suffering these days because it went with the euro and has no ability to lower its currency - while it faces demographic crisis (different than its neighbours) that hurts its economy. The Germans wish they could lower theirs.
Lower dollar isn't a crisis. It is just something else.
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