Why would we want to keep the dollar strong?
By Daniel at 22 October, 2009, 2:43 pm
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1) If the dollar crashes, we the people will be that last to know. All the Wall Street boys with be prepared for this situation. Result is, we the people will lose all our savings to inflation or god forbid hyper-inflation.
2) If the dollar crashes, we as a country have mostly service or financial jobs, our manufacturing base is small. Therefore we will have to put significant investment to start exporting more. This will cost a lot since many manufacturers of machinery our outside the USA and where we have machinery makers may have to buy components from outside the USA to build the final machines.
3) If the dollar crashes, oil/fuel prices for transporting items to Asia or Europe would increase significantly, and problems that we had coming form Asia would be effecting out exports (below).
This was a problem in the 90’s with Asia that few wanted to talk about, importing did not work out that well:
a) quality not as good (materials and workmanship)
b) long supply chains (not to mention all the damage due to rust during shipping for 8 weeks over salt water and make a change lose about 12 to 16 weeks worth of product and you get to air ship product to fill your manufacturing lines).
We can make quality parts but if they had transportation problems so well we (I was involved with these concerns in my job shipping small mechanisms from china in the 90’s, result was never do it again).
4) If the dollar crashes, all food prices would sky rocket (especially in a time when the Central Valley in California failing severely).
As stated before, this is the medicine we need to become stable however we will have many issues to overcome and our lifestyles will change drastically before stability can be reached.
- mpelchat
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