Venezuela devalues currency to boost spending

[Business_Casual]

http://www.reuters.com/article/idUSN096521320100109

Wow, and they are at least a net exporter (oil). Imagine what our devaluation will be like when the next debt auction falls flat and the children, er I mean Democrats, devalue to US dollar.

M_P

[SethB]

What is wrong with devaluing the dollar? It would increase exports.

Now China keeps the Renminbi low so that we buy a lot of their crap and they can't afford anything nice so they put it in the bank. If they devalued their currency we'd see some real changes.

[Business_Casual]

Yes, it would. But, for starters, we don't make much here anymore so everything would cost more. And since we import most of our energy, it would cost more again to move it from place to place. Another problem is all the fixed-income people would be impoverished by it.

M_P

[Nathan_Bell]

Yes, it would. But, for starters, we don't make much here anymore so everything would cost more. And since we import most of our energy, it would cost more again to move it from place to place. Another problem is all the fixed-income people would be impoverished by it.

M_P

Yup that is the weakness of the arguement for devaluing the $.

What do we manufacture that we would export in large enough quantities to make a spits' worth of difference?

We have to import our oil, if our dollar is devalued by 50% suddenely a barrel of oil is $164 per. Not good.

[chadbag]

http://www.reuters.com/article/idUSN096521320100109

Wow, and they are at least a net exporter (oil). Imagine what our devaluation will be like when the next debt auction falls flat and the children, er I mean Democrats, devalue to US dollar.

M_P

The dollar has been "devaluing" itself the last few years... That was one of the causes of the great run up in oil prices.

[tracker722]

*****************

[ForTehNguyen]

What is wrong with devaluing the dollar? It would increase exports.

Now China keeps the Renminbi low so that we buy a lot of their crap and they can't afford anything nice so they put it in the bank. If they devalued their currency we'd see some real changes.

youre kidding right? What do we export now, have you seen our trade deficit? Its going to make the imports that we gravely depend on extremely expensive. Sure we might get some more exporting, but guess what we import several times more and all of that just got more expensive. No country should ever purposely devalue their currency. Thats like a company purposely devaluing its stocks, why?

if china was smart they would depeg their currency from the USD and watch their purchasing power rocket.

[Heavy Metal]

youre kidding right? What do we export now, have you seen our trade deficit? Its going to make the imports that we gravely depend on extremely expensive. Sure we might get some more exporting, but guess what we import several times more and all of that just got more expensive. No country should ever purposely devalue their currency. Thats like a company purposely devaluing its stocks, why?

if china was smart they would depeg their currency from the USD and watch their purchasing power rocket.



It would make the cost of the crap they make go up in excess of its value and manufacturing would shift away from China. They keep the Renabi low to keep exports high and boost internal employment.

They are trading purchasing power for fuller employment.

Ulitmately, and not in the very distant future, further automation will kill even Chinas manufacturing economy.

http://www.uschina.org/public/documents/2006/09/us-manufacturing.pdf

The value of US manufacturing and the percent relative to the reasto of the world is stead and slightly rising. It is manufacturing employment that is declining and automation is a bigger factor than the Chinese. Just like once 95% of our economy was devoted to food production does not mean we have less food now that only 5% of the economy represents the Agricultural sector.

A lot of our trade deficit is foreign Oil. Fix that and you would go a long way toward managing the trade deficit.