U.S. dollar bouncing back
When the value of the U.S. dollar dropped, Americans traveling out of the country were bummed. But American companies made good money doing business overseas. Well, the tide is turning. Senior Business Correspondent Bob Moon reports.
U.S. one dollar bill (Marketplace)
More on The Economy, International, Travel, America's Financial Crisis
TEXT OF STORY
Kai Ryssdal: Until recently, struggling American companies could count on making up lost profits by doing business overseas, a benefit of the weak dollar. Well, thanks to the credit crisis the value of the greenback has now shifted. Dramatically.
The good news is, our dollars will buy more these days. But the bad news is, that their dollars -- whatever you call 'em -- will buy less.
Here's our senior business correspondent Bob Moon.
Bob Moon: As recently as July, a British pound would set you back more than two bucks. Today, it fell to its lowest level in five years -- around $1.63. The 15-nation euro is also slumping. Shouldn't we be celebrating that our greenbacks are now worth more? They'll buy more oil and other vital commodities, all things being equal. But these days, all things are not equal.
Ashraf Laidi: A rising dollar in these economic conditions, in the current market turmoil, is not a good thing for the U.S. economy.
That's Ashraf Laidi, who tracks currencies for CMC Markets. He points out our economy is tanking, too, and now it won't be as easy to sell our goods and services overseas. And, the money American companies do make in currencies abroad won't be worth as much.
Still, it could be worse. Robert Blake heads foreign exchange strategy at State Street Global.
Robert Blake: The dollar is still a lot lower against, in particular, European currencies than it was, say, at the start of 2002. So while we've regained lost ground in some respects relative to the past year or two, the dollar's levels currently are not that abnormal or out of line.
Americans might normally take comfort in seeing the value of the dollar grow. But at Roth Capital Partners, Donald Straszheim says, at this point, it's a mixed blessing.
Donald Straszheim: I would much rather have the currency be strong because U.S. growth was vibrant and our economy was competitive. Now, the currency is strong because, while we've been hurt by the credit crisis, other countries have been hurt even more.
Straszheim says that's not the right reason to be happy about a rising currency.
In Los Angeles, I'm Bob Moon for Marketplace.
Comments
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From Washington DC, DC, 10/23/2008
Good article and I agree with the longer term view of a weaker dollar. As I wrote recently ((http://www.savingtoinvest.com/2008/10/us-dollar-rising-and-outlook.html), the rapid rise of the US dollar in the near term is a result of the flight to safety to US treasury's due to the global financial meltdown. This just shows despite America's longer term challenges it is still viewed as the financial bastion of the world. Hard to believe with the all the institutional collpases, but in Red, White and Blue we trust.
From Trout Dale, VA, 10/22/2008
Gentlemen, Kai & Bob,
Marketplace & you guys are on my list of required listening and you always have good stories.
Now, I have one for you, and I will be waiting for your email, hopefully.
I have been aware of what I will share with you privately for a number of years, but I have just not been driven to try to get the story on the airwaves. However, after many attempts to get response from both McCain & Obama, it is resolved to approach you.
This is a moving story of how a private foundation has come to be the largest creditor of the United States Treasury. The debt owed by the USTD is pre-Federal Reserve and is payable only in gold. The amount has been fully validated by all pertinant authorities and exceeds imagination.
This is not a new story for it has been in construction for about 8 years and all legal details have been satisfied. I have my doubts as to whether you are aware of this foundation who is dedicated to helping America regain its position for its people economically. They are standing by and are awaiting the call to service.
Make no mistake about it. Both Pres. Bush and his father are well aware of the foundation. To imagine Bush would not make his legacy the solution that is available to him under this active proposal is beyond me. Personally, it might be thought of as dangerous, but nationally, it is genius, or at least realistic.
I want the best for America and the world. Amercia first and the world will follow. This is that kind of story, and there is no pain, not even for the ones who have been creating dolars out of thin air with derivatives for far too long. Everyone gets paid. No defaults and no debt.
Want to know the story? Write and we will talk.
Regards,
Rob
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