What does the deflating American dollar mean to you?

I read an article in the BBC saying their pound is stronger then the American dollar by more then double. So I did some more research and I found out the Canadian Dollar is also increasing while the American Dollar is decreasing, Along with the decreasing American dollar the Swiss banks lowered interest rates due to the poor American dollar! I understand that globally we are all intertwined economically but what is pleaguing my mind is the Question: What does the deflating american dollar mean for Americans? Good, Bad, Indifferent? With all the housing prices dropping that good (for me), but I can also see why it is trouble. I just need a little more indepth as to deflation on the dollar and I would be greatful if someone can explain it properly without a whole bunch of ignorant answers!!!!!! Thanks!

What does the deflating American dollar mean to you?small business loans

Deflation, like any economic event, has several consequences. The most obvious of these, the American dollar is worth less when exchanged for foreign currency. It costs more money for you to travel and more importantly, to purchase imported products / services.

The flip-side of this, is that American products are cheaper; especially for the rest of the world whose currency is suddenly worth more (relatively). Thus the US will export more goods / services.

To you, the average consumer, it means foreign goods are more expensive. But it also means that demand for American goods increase, fueling the economy. Also, those dropping housing prices are due much more to the glut of houses on the market rather than deflation. Hope that helps.

What does the deflating American dollar mean to you?

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deflation of the american dollar will make foregin goods more expensive to us, since it cost the company more to purchase the goods in the first place, and since partically all the consumer goods are imported that not good for us. also it will make travel to foregin countries more expensive.|||Deflation of money is ALWAYS bad, people think that the value of money going up is good but it%26#039;s not. Whenever you see deflation, it means that the US gov%26#039;t is in a recession (this means that business is going down and unemployment increases)

However, too much inflation (over 3% inflation) is bad because then it can cause a price wage spiral ( both prices and wages go way out of control). Right now, the deflation is at 3%, the gov%26#039;t will try and stimulate the economy by buying bonds it sold earlier and decrease interest rates so people take out more loans. More loands equals more spending and that allows businesses to thrive and bring the strength of the dollar up.|||I see several people have given some of the effects of the falling dollar, but no one has yet explained the reason for its decreasing value. In essence, the dollar is being devalued around the world because the rest of the world has less and less faith in its value. It%26#039;s as simple as that. The economic policies of US government have driven our economy into such a state of debt, both in terms of annual deficit spending and the total, overall long-term accumulated indebtedness, that other entities worldwide are beginning to doubt our ability to repay those debts. One of the biggest ways we GET into that debt is issuing bonds, which, in reality, are nothing more than IOUs. We%26#039;ve asked the world to lend us money, and when we pay them, and IF we pay them, we pay them in dollars whose value is guaranteed by nothing more than what our combined economy is worth, according to what our government says it is worth.

So yes, the dollar now buys less foreign goods, because they want more of them in order to feel they are getting something of value. And yes, our products sell more cheaply around the world. I note one poster suggests that exports are good for our economy, and there%26#039;s no doubt that is true. But, I am willing to bet that neither he, nor I, have enough information to figure out whether or not the %26quot;value%26quot; of that export market offsets the damage done to the economy as millions of us not benefiting from those export jobs find we have to pay more for everything.

Also, we are not experiencing %26quot;deflation.%26quot; Deflation is the opposite of inflation... Inflation happens when too much money is available to purchase too few goods and services. Prices go up simply because there is too much money around. Deflation is the opposite. There%26#039;s not enough money in the economy to buy the many products that are available. What is going on with the dollar is about devaluation, not deflation. The real truth is, we%26#039;re experiencing devaluation of our currency, coupled with inflation in certain areas of the economy, particularly including the areas of energy and food, because the US is competing with Europe, India, and China to procure an increasing tighter supply of both, and the last two economies I mentioned are becoming stronger and more wealthy by the day, giving them the wealth to out bid us for precious necessities.|||The correct term is Devaluation not Deflation. Deflation does not occur in modern economy. That would mean that the present value of money is worth less than future value. In other words prices drop as time goes by... The devaluation of the dollar means that more dollars will be needed to travel, and the actual %26quot;value%26quot; of a dollar has dropped. The good thing about this is you can actually benefit by purchasing Euro CD%26#039;s or investing in foreign companies due to the fact they will be purchasing infiltrating the American economy by investing in American products,companies or Real Estate Hope this helps.|||We call it USD, or the US Dollar. The USD has been falling since the election turmoil of 2000. The standard all currencies are measured against is Gold. Gold now trades for over $800 per ounce. Effectively, this means the US Dollar of 2000 is only worth 30 cents today.

First question is why the USD is falling against Gold. And the answer is easy. The US is borrowing far more than it%26#039;s bringing in. It%26#039;s as if you made $10,000 a year, but you were spending $15,000. You can%26#039;t do that year after year and be in good financial shape. The US is not in good financial shape. Excuses, no matter if it%26#039;s for war, does not fix the debt issue. I%26#039;m sure your spouse can think of reasons they spent money too.... but, hearing that month after month doesn%26#039;t fix your personal budget either.

The other reason is how currencies are valued. It%26#039;s a pyrmaid scheme on the largest of scales. Until Nixon, it used to be that 1/10th of our currency was backed by Gold. One tenth because some genious back in the 1800%26#039;s discovered that only 10% of the people ever came back for their Gold. When that discovery was made, then the banks decided that they need only hold 1/10 of the Gold necessary for the money they print. It all works great until a scare happens and people demand their money. Now, our currency isn%26#039;t linked to Gold. But, Gold is still the only world standard. That means our USD is free to go up and down against other currencies regardless of the Gold in supply.

The Central Bank from Europe, Australia, Japan, and Germany along with the US Federal Reserve just injected 315 billion dollars into American Banks and Investment firms to save them from going under because of the bad loans they%26#039;ve been making. That equates to 1/3 of the annual income taxes US Taxpayers pay. This is not a loan. This is printing more money. When you just print money without taking other money out of circulation, you devalue the money (e.g. this is the same as if you were a company and released more stock - you%26#039;ve deflated the value for current stock holders).

The problem is that loans need to be made for more money to be created. Eventually, there are not enough people to take out the loans to meet the growing needs of the currency. Then, currency is just printed. Without Gold, even just 1/10 scale, to back it up.... you have a currency that is potentially worthless.

Because the US is such a debtor nation, it%26#039;s critical that the world trade oil in USD. The world does. Iraq tried to change that, knowing the Euro was more stable. That wasn%26#039;t acceptable, so we took their leader out. Iran has raised this desire to trade oil in Euro%26#039;s too, and even opened an exchange to do just that. It resulted in threats of war. They took it off the table for awhlie. Now, it%26#039;s back on the table. Now, it%26#039;s back to threats of war. Why? 80% of the USD is traded for oil, not in American hands. If that 80% isn%26#039;t needed, the USD has no need outside the USA and will fall extremely fast.