JackM wrote:
I'm not good with macroeconomic principles, but isn't the US deficit a big drag on the value of the dollar? If so, maybe it is time to return to fiscally responsible budget management.
I agree. I'm all for that.
Everybody knows about the debt and the budget deficit. But the trade deficit is a major problem that is too often overlooked.
That said, the drop in the dollar is not all bad news. We were due for a drop (probably too late to do much). It actually makes US produced products more competitive in the world market. Also makes imports more expensive here further reducing the trade deficit.
But here is the major problem with that and I am making a long story short.
China's communist government pegs the value of the yuan to the dollar. So, when the dollar drops on the world market, it doesn't drop against the juan unless they let it drop. Therefore, cheap Chinese imports do not become more expensive. Therefore, no improvement in our trade deficit with China, and our biggest trade deficit is with China. Not only that, China owns the largest portion of our national dept. It is totally messed up and something's gotta change. Free marker only works when everybody follows the same practices.
The US is now too dependant on China and Chinese goods. It is mind boggling when you look into it. Not just Chinese end products, but Chinese ingredients in other products (and not just wheat gluton in dog food?). For example, 40 percent of the apple juice sold in this country is from China. Who woulda thunk that. So much of our everyday life depends on China. Not many people want to see the price of cheap Chinese imports go up and the high inflation that results, followed by higher interest rates, etc ...
We are at the point that they only way we can improve things here is if we ask the Chinese, very nicely, to cut us some slack. Yea, that's gonna work. :roll:
And back to fuel prices. How many of you realize that almost all of the major oil companies are NOT US companies. I think only one of them is. We have no control over them. We need to start taking care of ourselves for a change.