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Old 09-15-07, 06:47 AM   #6
JALU3
Grey Wolf
 
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Although it makes it harder for the US to buy foreign goods and services, with the value of the dollar falling . . . it also does the opposite by making it more cost effective to by US goods and services.
Look at what self-devaulation of currancy value has done for China (as opposed to the other China) . . . since their products and services are so inexpensive, it has allowed foreign currency to flow into their nation-state allowing them to use that currency to modernize their industry, infastructure, and military. Furthermore, now that they have a large amount of foreign currency and ownership of foreign debt, they can use that to manipulate the world market in their favor.
So although one will not find it as cost efficient to take a trip to Paris . . . it will increase foreign tourism to US Shores . . . and may reduce the trade deficit which the US currently has.
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