Why does the dollar continue to nosedive, and is there anything the President can or should do about it?

Question

I am guessing the answers here will be mostly divided along party lines....

Answer 1

It's happening for a lot of reasons.  The President really can only do so much right now because of bad policies set up by him years ago.

Cutting interest rates helps in the USA, but it devalues the dollar.  So we get a small break here, but not if we are going outside the USA.

Most Reps probably don't care though because many probably don't leave the country on trips that often.

Answer 2

Since WWII the US government has used the fiscal policy of inflation to pay off the national debt. It is easier and cheaper to pay a debt with dollars that aren't worth as much.

Example, We owe China 1 Trillion dollars in trade goods and money. The value of the dollar drops by half. Now we owe China trade goods that cost us only half a Trillion dollars.

Inflation devalues the dollar along with other economic factors. Such as an expanding economy creates more money. More money lowers the value of whatever backs the money, whether it be trade goods, credit, or precious metals.

There are too many factors effecting the economy to list them all here, but the two above are the biggest causes of a falling dollar.

Answer 3

Because the U.S. has done nothing but flood money into the economy for the past 12 years . . .

Answer 4

The dollar nosedived, but it's starting to recover.

The main reason is that the interest rate is so low.  Foreign investors start looking for higher payoff investments (like oil) when the fed sets the interest rate low.

The dollar started climbing back when the fed signaled that the interest rate was low enough, thank you, and wouldn't make any more cuts.

Answer 5

Read these:

http://homepages.stmartin.edu/fac_staff/...

http://www.presstv.ir/detail.aspx?id=432...

Answer 6

Simple economics. The "real" interest rate in the US is much lower than in other countries (EU, UK, Canada). The only exception really is Japan. Monies flow towards higher rates. Therefore more people are selling the dollar than buying, hence it's decline.

The President has absolutely nothing to do with the value of the dollar. US monetary policy is administrated by the Federal Reserve. A private corporation that is "owned" by it's member banks.

Answer 7

because when the federal reserve took over control of the dollar it stopped being backed by gold which is what held its value and started being based on the belief in its value. Now that other countries no longer have faith in our dollar its value goes down. and the Fed Reserve's answer to that is to print more money, which increases the loss in faith in its value.

Answer 8

listen to Politically minded, shes smart, theres ur answer. The federal reserve is to blame....