Jun 02 2009
USA Export: Dollar Weakness
“A weak dollar makes USA export products more attractive to buyers in foreign countries, which helps U.S. companies sell more stuff.” comes from the article “What’s behind the dollar’s gyrations? – U.S. Money was strongest when economic crisis was worsening, the seesawing dollar from the Associated press published amongst others by the Dallas Morning News on June 2. In short, the reason for the dollar recent weakness (see http://www.xl-group.us/files/Currency_Exchange_Matrix_Table5.pdf ) is the increased amount of debt the United States has amassed in recent months.
The weakness of the Dollar helped the US getting out of the great depression of the 1930’s and so the similarity may be strong between both recessions. USA export products helped American companies grow and put more people to work.
Other people may argue that the dollar’s weakness is due to the increase in oil prices. But whatever the reason, the time to export is now. It is not any time soon that the US government will repay its debt and therefore our currency’s weakness will continue.
Today, any product that is similar in construction is at least 40% cheaper for Europeans just because of the exchange rate. Yes, some-one must be paying for shipping. Figure about 19% transportation costs and it’s still 21% cheaper! Even Europeans will want to save a fifth of the cost for quality products. Experts predict that the US Dollar will still lose value against the European currencies. Start making plans to include USA export in your business plan today.
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