The € over the past many weeks and months has collapsed utterly in price and value against every currency but the US$. This non-collapse likely means that the US$ is weaker even than the €, which says something ugly about the US$ and, by extension, the USA.
But what precisely? No question the USA pursues a never-articulated but nonetheless damning policy of debasing its currency - pretty much from Day 1, when politicians learned it is much easier to foist our problems off on international holders. Even so, the USA as a political entity does not circle the drain as the EU seemingly does. And yet international currency investors and traders continue to shun the US$.
I get that it is easier for American companies to sell more product abroad, if our currency is cheaper (an item's price in dollars is cheaper). Such a policy calls into question our values, even our morals: If this is how we treat (value) our currency, what other crucial items do we debase and/or devalue? And I sure would like to see American company executives compete on a level playing field, one in which international buyers buy for reasons other than cheap(er) price.
Conversely, you and I feel the pain of the US$'s cheapening value each time we visit another country, where any transaction requires even more dollars to facilitate. "One can of Coca-Cola is $6...? You must be joking!"
Our national policy ushers in - arguably, even creates - our coming Era of Diminished Expectations, and our national Day of Reckoning.
Sad. It did not have to be like this.
-- David M Gordon / The Deipnosophist
Labels: Currencies, Economics, Geo-politics, Humanities