economics makes no sense

Ok.. world economics i admit make no sense to me, but this article reads like a joke to me:

story.news.yahoo.com.../nm/20030531/pl_nm/forex_bush_dollar_dc_3

Here:
"President Bush said the "devalued" level of the dollar on global markets runs contrary to U.S. policy in favor of a strong dollar, according to an interview transcript released on Saturday. "

the devalued dollar runs contrary to the US policy in favor of strong dollar??

Seriously, that's the dumbest thing I've ever heard.
That's like saying the resentment of america runs contrary to the US policy of not being resented...

Two things first

1. The US dollar is devaluating
2. Until now it has been US economic policy to maintain a strong dollar

So if for whatever reason the USD devaluates that means it is going against this policy. (BTW just in case u didnt know the government does NOT control the value of the dollar)

A low US dollar is crap for us down here in Oz. Yeah its nice coz all ur fancy # costs less but its crap for our economy coz u buy less of our stuff.

Get you dollar up

Inflation is something that will always be, it always has been.

Although the verbage is kinda screwed up, this is just another manifestation of the economic warfare being waged between the US/UK and the EU.

The EU is attempting to suppress the US$, for two reasons: first to actively hurt the US economy, and the timing it just right to hurt it bad enough long down the road to (hopefully for the EU) hurt Bushs reelection. Second, by devaluating the US$, it makes the Euro look very attractive to OPEC as an oil standard currency (the US$ has been the oil standard currency throughout history, as the strongest currency, until the arrival of the Euro).

If the EU is successful in getting OPEC to swap the oil standard currency to the Euro, first of all it will give the Euro a massive boost in value (seriously overvaluating it), and also further devaluing the US$ to the point of a massive depression, far outstripping the Great Depression of the 1930s. This depression would be so great as to force military action by the US, likely resulting in a true world war, in order to break out of it.

Which of course is why we are currently bunkering down in the midst of OPEC territory... we are determined to keep OPEC from making this switch, even if it requires military action... after all Iraq was the first OPEC nation to publicly state thier intention to swap.

dragonrider I give up your refusal to accept the fact that Americas poor economic performance is to blame for the weaking dollar is most exasperating. Look to Bush (US corporations) and his policies rather than blaming it on conspiracies

You worry too much.
The Euro isn't going to be strong enough to challenge the dollar for a long, long time.

Europe's economies are in an even worse state than the US.

Who said anything about inflation?
Yes inflation will always be there. It has to. Without inflation there is no growth. 0 or negative inflation is an extreemly bad state for an economy to be in.

Now inflation has no effect on the currency unless it differ significantly to other countries. As far as i know all the major trading nations of the world and i could be wrong (Europe, US, Japan etc) all have approximately the same inflation rate so inflation has no impact on the value of the dollar.

I feel you. I really do, I feel you.

Yet I wonder where you get the impression that this turnover will result in a depression greater than the one prior to WWII. Can you try and explain what leads you to believe that the Euro's surge will make our dollar slump to such lows???

Thanks.


Abe

[Edited on 1-6-2003 by Abraham Virtue]

I wouldnt be to sure that the EU wants its currancy to be higher then the USD. Common misconception is that a high value currency means a good economy. Its the other way round. A mid to low value currency means that less people in your economy are buying imports and more people outside are buying exports. This means unemployment goes down economic growth goes up inflation goes up and external ballance improves.
Those 4 things satisfy 3 of the 4 primary economic aims. Unfortunately inlfation is inversely linked to unemployment and economic growth so achieving that as well is a tall order.