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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (54119)	6/14/2000 7:59:00 PM
From: UnBelievable	Respond to of 99985

A decline in the dollar against other world currencies will result in a reduction of the portion of the world's economic product that the US will be able to claim. This would mean that the amount of goods other countries have to export to the US would decrease. This does not mean that the value which those countries receive in payment for the decreased supply would also decrease proportionately. A good example is oil. The oil producing countries have found that while raising the price (by limiting the supply) does reduce the amount of oil they export, it does not reduce the value they receive for the reduced level of exports. Similarly a monopoly or oligopoly does not maximize profit by maximizing revenue. The United States has placed itself in the position of being dependent on the exports of those countries. This is not as bad as it sounds because free trade benefits all parties. The United States will still be better off than it would be if it were not to trade with the rest of the world (a choice which I don't think the US could make if it wanted to.) It just won't be as well off as it has been.