What does the weakening of the dollar really mean?

Question

In all its implications? What are its real effects? What is causing it? Thanks...I struggle with economics, but want to learn.

Answer 1

The weak dollar means that we can't buy as much. In other words, our weak dollar could mean that we spend $30.00 for goods instead of $20.00.  Our dollar is going down because of several factors: 1) inflation; 2) deficits; 3) spending more than we have; 4) belief that the currency is not as good as it used to be; 5) trading. We also have a trade deficit. We import more than we export.  Our jobs have gone overseas. Our standard of living goes down.  

Weak Dollar - What does it mean? EES Info Report

Weak Dollar - What does it mean? Explanation of how currency affects YOU ... Weak dollars can be of a great advantage to the US in one way, and a definite ...

www.ees.net.nz/info/weakdollar.htm

Answer 2

When it comes to manufacturing it has two effects - makes exports cheaper due to other currencies (euro, etc) buying more  dollars than previously.  It also impacts manufacturing as it will make raw materials that have to be imported in more expensive.

Answer 3

There are tons of things but the main point you must get is supply/inflation. There are too many dollars in the world; just like if everyone had a diamond in the world they wouldn't be worth that much - same thing. To get a thorough process of how it really works, watch "Fiat Empire" on Google free video online. It explains the Feds role and they are the culprit. They basically print money that has no true value. The way debt is monetized makes more worthless dollars printed, lowering its value and raising inflation. The monetization of debt is an evil thing. There is what has created the credit crunch via mortgages

Answer 4

A weak dollar means that the money is worth less (also called deflation). This means that US products are cheaper in comparison to other nation's products which will actually increase US exports.

Deflation is occuring because the Federal Reserve is artificially lowering the interest rate. Governments often borrow money (by issuing bonds) to fund additional spending. The problem occurs when government debt 'crowds out' private companies and individuals from the lending market. Increased government borrowing also tends to increase market interest rates. The problem is that the government can always pay the market interest rate, but there comes a point when corporations and individuals can no longer afford to borrow. So, to keep corporations and individuals to continue to borrow, the FED has to lower the interest rates by increasing the money supply using monetary policies. There is more money available which is making the money actually worth less because so much money is being printed.

Government is continuing to spend, spend, spend, and consumers are being encouraged to spend also. The consumer price index is increasing which means inflation is also occuring along with the deflation.

Answer 5

it means product from foreign countries will be more expensive.