Dollar tumbles broadly as Fed moves expected

[Elmore Furth]

If we devalue the currency, is that the same as deflation?

There is an impression that there is a race to the bottom as countries try to devalue their currencies to remain globally competative. It looks suspiciously like there is a desire to keep up with the cost of goods from other export-driven nations in the global marketplace. The latest effort at devaluation came from Japan on Tuesday when its central bank nudged its target interest rate to zero.

Currency War? Why Countries Are Rushing to Devalue

Associated Press
1:47 p.m., Wednesday, October 6, 2010

NEW YORK (AP) — The euro on Wednesday moved above $1.39 for the first time since February, while the yen struck a 15-year high.

The dollar is sliding broadly because investors expect the Federal Reserve will increase its support for the U.S. economy, driving down interest rates and dinging the currency's appeal for investors.

The International Monetary Fund forecast Wednesday that the U.S. economy will grow just 2.6 percent this year, below its previous estimate of 3.3 percent, and that growth will slow to 2.3 percent in 2011.

A private jobs survey by payrolls company ADP said U.S. employers cut jobs in September, the first time in seven months.

A measure of the dollar against six actively traded currencies is trading at its lowest level since January after falling nearly 7 percent in September and October.

Fed members have said they are willing to offer the economy more relief. Buying U.S. government debt would lower interest rates, which the Fed hopes would trigger more economic activity. But lower rates mean that assets bought in dollars offer investors lower returns, weighing on the dollar.

Dollar tumbles broadly as Fed moves expected

[phantom power]

1. devaluing would be *in*flation

[no_hypocrisy]

2. A weaker dollar is supposed to entice other nations to purchase our exports.

(Yeah, I know . . . which ones?)

[Art_from_Ark]

8. Here in Japan, the dollar is the lowest it's been in 15 years

I keep looking for US-produced consumer products but about the only things I can find in non-specialty shops are some entertainment products (DVDs and CDs), California citrus products and wines, and Hawaiian pineapples and chocolate-covered macadamia nuts. There are a lot of American brands, but they're almost all produced locally, or in China/Taiwan/Philippines. There are also quite a few American fast food places, like McDonald's, Kentucky Fried Chicken, and Subway, and it looks like Burger King has bought out Lotteria, a Korean-owned fast food place.

At any rate, I haven't seen any noticeable effects from an increasingly cheaper dollar. And air fare on US-based carriers seems to be getting more expensive. Maybe jet fighters are getting cheaper, who knows.

[MrTriumph]

3. Bush & Obama lead us into 3rd World status

This continued Bush-era policy is totally wrong headed.

The correct- and more difficult policy (which would mean hard work and less time for golfing) would be to push China and India into increasing the values of their currencies.

The result would be more jobs at home as low-tech imports are replaced with US made goods for our home market. In the real world, that is far easier and quicker to accomplish than to try to create, market and distribute higher tech merchandise for Europe.

[xchrom]

4. Recommend

[TheWatcher]

5. But as long as the Stock Market keeps going up, everything will be fabulous and the "Recovery"

will continue unabated.

Remember Kids, the Stock Market IS the Economy.

it's the only thing that matters.

Please Stop Hating America, and helping the terrorists win.

Buy a copy of The Secret and sit back and be prosperous.

:sarcasm:

[girl gone mad]

6. The stock market is tanking when priced in gold.

The catapulters really hate that inconvenient fact.

[northernlights]

7. inflation -- higher prices for imported goods...

such as oil. With a lower value to the dollar, it will take more dollars to buy foreign goods and fewer foreign currencies to buy dollars or US goods.

Everybody is hoping to export their way out of the catastrophe. Can't work, cause we're all going down together.

[CanonRay]

9. Driving down interest rates? To where?

Aren't they at fucking zero?