Comments on: The real reasons for the dollar’s decline http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: LuisdeAgustin http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26511 Thu, 12 May 2011 20:54:18 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26511 Per work by David Ranson, head of research at Wainwright Economics, agreement on the commodities front, but exception on the comment that a weak dollar is not going to do much harm if any to the US economy.

Ben Bernanke’s recent forecast that the surge in commodity prices will be “transitory” merely shows how ignorant a well-trained economist can be. His and President Obama’s views are prime examples of George Orwell’s quip that “there are some ideas so wrong that only a very intelligent person could believe in them.”

Although politicians are aware of the commonly recognized connection between currency weakness and commodity price inflation, they are in denial about the easily demonstrated link between both of these market phenomena and inflation generally.

Luis de Agustin

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By: morozova http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26296 Thu, 05 May 2011 21:46:42 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26296 The USD is heading where it should–somewhere between the Mexican and the Philippine Pesos, then Canada can put up a fence to keep out undesirables. Unless NASA finds US buyers in space, then US paper debt & its ponzi scheme become worthless.

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By: alohafred http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26266 Thu, 05 May 2011 08:31:03 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26266 Felix, your last comment about Americans being massively overpaid compared to their equally-productive and well-educated counterparts in countries all over the world” is absurd. As a columnist that has won kudos for his empirical-based analysis, I would like to see some evidence to this effect, rather than polemic. This sounds like the claptrap that Tom Friedman purports regarding outsourcing in India, ignoring details like the fact that some 90% of engineering graduates in India are unemployable.

And does then the rising Euro suggest that the Dutch, Germans, Finns, etc. have been massively underpaid compared to their (more-likely) equally productive American counterparts?

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By: DavidMerkel http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26260 Thu, 05 May 2011 03:56:56 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26260 His arguments are like some that I made around three years ago, and that I expressed at an endowment investment committee meeting recently:

http://alephblog.com/2008/06/21/rethinki ng-comparable-worth/

There is no shortage of labor in the capitalist world.

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By: FifthDecade http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26246 Wed, 04 May 2011 17:17:43 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26246 The dollar is falling because taxes are too low.

This has meant increasing government Budget Deficits, and extra money for consumption of increasingly foreign goods which increases the Trade Deficit.

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By: mjturner http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26244 Wed, 04 May 2011 15:44:13 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26244 The last point doesn’t work. If the dollar is falling, but US inflation is lower than (say) Chinese inflation, then its only a notional convergence of wages, not a real convergence.

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By: Jonathan0 http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26243 Wed, 04 May 2011 15:33:11 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26243 All of you are right!
1. The dollar has been stronger than it should have been because it is THE reserve currency.
2. The world economy has mostly recovered from WWII and the idiocies of Russian Communism, as a result the US Economy is NOT dominant, and we get less of a premium for the dollar, since other currencies can substitute.
3. The inactivity of Bush/Carter/Bush/Obama toward energy policy is swamping the world with dollars, making dollars worth less.
4. The political calculus of Democrats, Republicans towards balancing the budget creates the currency needed to run the government and provide the benefits people do not want to be taxed to provide. (Inflation is just a tax, like any other, caused by the laxity associated with a Fiat Currency.) Inflation is a regressive tax, hurting those least able to adjust their income, the old, the poor, the less educated, the disenfranchised. It is a tax voted for by the Poor, who think they are getting something for nothing from the Democrats, and by the Rich, who easily benefit, using financial tools. The Middle Class, decreasing in numbers, cannot easily defeat the politicians, from the Left and Right, who promote these policies.

The result is an increasing divergence in wealth between the poorest and the richest, while the center is torn apart. The long term result will be disaster for all, unless action is taken.

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By: ottorock http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26224 Wed, 04 May 2011 04:00:55 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26224 The Brazilian Finance Minister disagrees.

http://en.mercopress.com/2011/05/03/us-p rinting-press-is-flooding-the-world-with -dollars-claims-mantega

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By: JamesVU2000 http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26221 Wed, 04 May 2011 02:38:59 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26221 I dont know. A huge CA deficit, meager private savings, and a huge gov deficit sounds like a reason to avoid the dollar. We don’t have a credible path forward

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By: GRRR http://blogs.reuters.com/felix-salmon/2011/05/04/the-real-reasons-for-the-dollars-decline/comment-page-1/#comment-26216 Wed, 04 May 2011 02:02:38 +0000 http://blogs.reuters.com/felix-salmon/?p=8124#comment-26216 Krugman touched on this previously. As anyone that has traveled outside this country knows, the dollar fell during the Bush years quite significantly. It hasn’t been a bargain to go to Canada for nearly a decade.

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