i read an article from www.npr.org from eric weiner that says the a weak dollar does not necessarily translate to a doomed dollar and economy. mr. weiner states that It's difficult — impossible, some economists say — to tease out the effects of a weak dollar from all of the other variables affecting the economy at any moment. But one thing is clear: The weak dollar creates ripples around the world. Some of those ripples are good, some bad. But that, too, is relative. Where you stand on the weak dollar depends largely on where you sit.
The most obvious effect of a weak U.S. dollar is its impact on American tourists traveling to Europe. In Paris, $7 cups of coffee and $50 taxi rides are suddenly de rigueur. A weak dollar affects even those American consumers who never leave home. If you have a penchant for German cars or French wine, expect to pay more, as European manufacturers raise prices to compensate for the weak dollar.
In fact, some economists warn of an "umbrella effect" — the tendency for the prices of all goods and services to rise once a few do. Other economists, though, say the risk of inflation is exaggerated. The core inflation rate, they point out, remains low — about 2 percent — despite the dollar's recent slide.
A weak dollar is also good news for American manufacturers. Their products are now less expensive, so they can sell more. That's why companies such as Boeing and Caterpillar like a weak dollar. It's also why many economists like it: As these big U.S. manufacturers sell more, the U.S. trade deficit shrinks.
There is one downside, though, especially for smaller American manufacturers. The weak dollar means that the firms themselves are cheaper and, therefore, vulnerable to a hostile takeover by foreign companies.
but then again, i guess every country goes through ups and dows economy-wise. let's just hope the us bounces out of this one soon.
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