Thursday, February 4, 2010

Where Are Obama's Foreign Exchange Advisers?

Obama is saying is that the U.S. would be better off if the dollar weakened against the yuan. This is nothing but shoddy thinking. A weaker currency can never make an economy stronger. A weaker currency may make U.S. exports cheaper, but a weaker currency also makes imports more expensive. Devaluing one's currency is thus a fool's game, since it benefits one segment of society (exporters) but harms everyone else (consumers, who have to pay more for the imported goods they purchase).
From "Obama clueless on FX rates" by Scott Grannis on Calafia Beach Pundit.

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