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Politics : PRESIDENT GEORGE W. BUSH
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To: Bald Eagle who wrote (408141)5/21/2003 1:26:28 PM
From: DuckTapeSunroof  Read Replies (1) of 769670
 
Read my post more closely.

The falling dollar does 'LITTLE' to lower the costs of our manufactures under the current circumstances.

1) Yes, our products now have a lower price in Europe... but so do those of all those Asian countries who peg their currencies to the US dollar (and who - like China - vastly undercut us in price already).

2) Our trade deficit with Europe is SMALL compared with our deficit with Asia (less than $66 B. with Europe vs. over $220 B. with east Asia), so the beneficial effect of a lower dollar plays out only against the smaller trans-Atlantic trade flows and, as I mentioned, Asia still undercuts our pricing advantage with Europe.

3) The biggest export winners - with the falling dollar - are the Asian exporters. Because of their pegs to the US dollar, the US dollar hasn't declined vs. their currencies... preserving their fast rising trade surpluses with the US. Also because of their dollar pegs, they become equally more competitive with Europe.
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