Re: Forbes: "Budget To Nowhere"


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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On Wed, 6 Feb 2008 19:38:00 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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On Wed, 6 Feb 2008 17:06:04 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message


<snip>


There's nothing to swallow. Lower dollar against other currencies makes
your
goods look cheaper to them. That's as obvious as the sun in the sky. Why
do
you think all these Europeans were flying over here to go shopping?



I'd much rather be flying over there to go shopping,
and touring, as the days of America's greatness, but
things cost twice as much now in American razbuckniks.

And there you have it. You know as well as I do how few Americans cross
the
pond in their lifetimes. The few of us that do, it sucks, but to the vast
majority of Americans, not a major issue.


What about the cost of imported goods?

Seems to be a mixed bag. If there's local competition, the imported goods
still have to meet the cheaper price standard or get ignored. Despite the
regrettable state of US manufacturing, there are still domestic alternatives
in almost every class of goods, with consumer electronics being the major
exception (I don't think we have any domestically produced shoes anymore
either, but I may be wrong.) I haven't noticed any discernable increase in
the cost of imported wines, for one example, since imports have to price to
meet the cost of domestics or remain unsold, and the aforementioned consumer
electronics remains very cheap here, because they're not commodities and the
sellors price them at whatever the market will bear. I've shopped for so
much stuff in Tokyo and Hong Kong and Shanghai, and the prices are always
cheaper here. My relatives in Europe just stare in shock at what we pay for
laptops -- it's much more expensive for them there. Same with autos - the
imports have to cut margins to stay competitive, because if the import
premium grows too large, buyers either buy American or buy used.

OTOH, we all know that the value of the dollar is killing us on commodities
like gasoline.

I just made a boatload of reservations to spend June in the Eurozone. Here's
what was weird -- airfares are dirt cheap. A double leg from Stockholm to
Istanbul then on to Paris was like $350 a person. I'm going from Stockholm
to Thessaloniki to Paris, about the same fare. Getting from Houston to
Stockholm, also pretty cheap -- under 1200 per round trip.

What wasn't cheap was the ferry and trains. To go from Stockholm to
Gotenburg by train (about four hours) is $75 per person. Ideally, we wanted
to fly to Hamburg and then drive up and take the ferry from Kiel to
Gotenberg, but the cost of the ferry kaboshed that idea -- like 250 Euros
per person (a 14 hour ferry ride, to be sure, but I can take a three day
cruise out of Ft. Lauderdale, all food included, for that much money.)



There is, of course, the matter of currencies always moving against one
another. Europe is now starting to slow, and their central bankers are
coming under pressure to ease. When they do, the downward pressure on the
dollar stops (actually, the dollar is either flat or up a bit since the
middle of last month just on that reason.)

America has never in my lifetime been this low.
Or been so deep in hock.

I don't think there's any question that we were "lower" economically in the
late 70's. We easily forget that people were taking out mortgages at 15%
interest.

We weren't as deep in hock, of course.




Everything we buy from overseas is going to cost more now,
after we've already eliminated our ability to make our own stuff.
Do you think other nations are going to sell goods to us below
their cost out of charity because our dollars aren't worth much
to them anymore?

No. I think if the condition is prolonged and looks permanent, Americans
will start manufacturing businesses again, particularly as wages
overseas
escalate.


So parity with Mexico will be "Mission Accomplished"
What a shame, what a disaster, what a sad end for
the USA. Thank you, Reagan, Bush 1, and Bush 2.
Good job. Who could possibly think otherwise?

What matters is standard of living. Snark aside, that's an issue not
necessarily correlated to relative currency values.

Standard of living goes down when one can no longer
afford foreign goods, and when foreign sources for
domestic goods cost more because of a collapsed dollar.

However, outside of gasoline and food (the first affected by the dollar
valuation, the second only indirectly affected by it) that sort of inflation
doesn't seem to be occurring. The core CPI remains low. As I said, a mixed
bag.

JG


.

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    (soc.retirement)