stdreb27
Active Member
Originally Posted by sign guy
if im not mistaken the dollar was pulled off of silver and gold in 1973
No it was before that, 73 was when we stopped pegging our exchange rates.
As a recent graduate of Economics, May 07. I have a perspective. Now I do say, It is a math degree not an english one so please excuse any grammatical errors.
It boils down to demand for the currency, and demand for the currency has to do with trade. Basically people aren't buying american made stuff so demand for the US dollar is down, and we are importing stuff, that we pay for in US dollars. So there is alot of US dollars floating around and not alot of places to spend them.
That being said, the value of the dollar being down isn't a bad thing. It helps out our manufacturing centers. By basically putting everything we export at a lower price. And it creates a price barrier for imports. So we buy more american products since they are cheaper than foreign products.
There are alot of different perspectives to the deeper nature of this, some point to the Euro as a factor, having a unified currency alleviates all the exchange rate risks that Europe had. Before the euro, the europeans used the dollar to address this risk because it was and still is the worlds most stable currency.
It doesn't have anything to do with seniorage (printing money) that is more tied to inflation, than the devaluation of currency. Until you start printing to much of it, ask latin america and their problems of the 80's and 90's.
if im not mistaken the dollar was pulled off of silver and gold in 1973
No it was before that, 73 was when we stopped pegging our exchange rates.
As a recent graduate of Economics, May 07. I have a perspective. Now I do say, It is a math degree not an english one so please excuse any grammatical errors.
It boils down to demand for the currency, and demand for the currency has to do with trade. Basically people aren't buying american made stuff so demand for the US dollar is down, and we are importing stuff, that we pay for in US dollars. So there is alot of US dollars floating around and not alot of places to spend them.
That being said, the value of the dollar being down isn't a bad thing. It helps out our manufacturing centers. By basically putting everything we export at a lower price. And it creates a price barrier for imports. So we buy more american products since they are cheaper than foreign products.
There are alot of different perspectives to the deeper nature of this, some point to the Euro as a factor, having a unified currency alleviates all the exchange rate risks that Europe had. Before the euro, the europeans used the dollar to address this risk because it was and still is the worlds most stable currency.
It doesn't have anything to do with seniorage (printing money) that is more tied to inflation, than the devaluation of currency. Until you start printing to much of it, ask latin america and their problems of the 80's and 90's.
