President Donald Trump on Tuesday said he has no problem with the sharp decline in the dollar that’s been triggered by convulsions in global bond markets and growing skepticism about the U.S.’s reliability as a trading partner.
“I think it’s great,” Trump told reporters in Iowa when asked about the currency’s decline. “Look at the business we’re doing. The dollar’s doing great.”
Trump has long maintained that a weaker currency helps industries that he’s seeking to boost — particularly manufacturers, but also oil and gas. And U.S. corporations that export goods and services abroad typically report stronger earnings when they can convert foreign payments into a weaker greenback.
It’s generally true that if your currency is weaker against a country with a stronger currency, the other country has an incentive to buy things from you - because you can sell them cheaper than they can make them themselves. This is why the US buys so many manufactured goods from SE Asia.
But it means you have to already have a manufacturing infrastructure, which the US has much less of today than in, say, the 1950s. Also, it helps if your government isn’t pissing off the entire world.
A lot of the US’s soft power comes from the US dollar. Yet another way to undermine their own country. Valodja must be ecstatic.
Come on everyone will want to hold their reserve currency in a sinking dollar because it’ll be worth more!
To notch Trump math right there.
And U.S. corporations that export goods and services abroad typically report stronger earnings when they can convert foreign payments into a weaker greenback.
Is my smooth brain processing this correctly?
He wants a dollar to be less valuable so that a company can convert their foreign sales into “more” US currency, saying “hey look, because of Trump I made $1billion” but that $1 billion is actually only as valuable as $500 million would have been? So we can all go “hur dur big numba good good!”
Is that it?
The thing is, that billion dollar is worth a billion dollars of stuff. A weak currency is not the same as inflation. It’s just the value of your currency compared to all the other currencies.
If you are doing manufacturing, then having a weak currency is good. You buy raw materials locally, you take those abroad and sell them, and then you have more US dollars to buy raw materials again.
If you’re importing, though, then the opposite is true. You prefer a strong currency. The USA currently imports more than it exports.
Giving the boffins in the White House the benefit of the doubt, maybe they want to strengthen the manufacturing industry within the USA? They are losing pretty badly to China on that front. (China intentionally keeps its currency weak for this purpose, BTW). It’s pretty clear that the USA wants a war with China, but that’s pretty difficult to supply if you can’t actually make anything locally.
Ha, I’d say to try not to align anything he does with logic - you will likely not be able to make much of a connection, unfortunately. Your smooth brain processing still isn’t smooth enough to be at their level.
Damn, I’m still not stupid enough to comprehend their greatness lol
He’s just pushing for whatever Putin tells him to do.
I mean it can be a valid strategy to gain ‘market share’ in the world. China does this successfully. This is good for big exporting companies and sucks for the population regarding buying imported goods.
Because China basically produces everything, the Chinese can simply buy domestic products to offset the negative effect.
But yeah for a country like the USA, which doesn’t produce nearly as much this will just suck. Imported goods will be more expensive (even more so with the genius tariffs) without the option to buy domestic goods because there simply are none.
Perhaps the idea is to stimulate local manufacturing? But I don’t really see a reason why they wouldn’t just explicitly tell us that if that is the case.
Yeah, but don’t worry, they defeated inflation!
Except that the company does make actual profit from the declining value of its employees’ salaries.
So does Putin.
Probably a coincidence
Don’t forget China.
Conventional wisdom is that a lower dollar is more attractive to manufacturing. So unfortunately MAGA voters will uncritically believe him.
I mean, a weaker currency really does boost your export value. That’s why Canadian farmers tend to consider the weaker CAD a benefit - they get paid more CAD per yuan when exporting soy or canola for example.
The issue is that the US intentionally positioned itself with a strong dollar so they can import stuff cheaper. The deal for American “exorbitant privilege” was essentially “hey America, you can have the world as your shopping mall with a strong currency for cheap imported goods, but in exchange you’ll provide the backing for collective defense with your extra budget, stay stable, and buy our goods”. Trump wants to have his cake and eat it too, maintaining the effective global tax via USD transactions but also have a weaker dollar for American exporters. This is all that hubbub about “reducing trade deficits”… which were created intentionally as part of that deal in the Bretton Woods/post-Bretton Woods Era.
US consumers like cheap phones, TVs, imported fruits, and travel. The strong dollar is a necessity for this. Much of the US debt is heavily subsidized as a side effect of a strong dollar as part of that exorbitant privilege exchange. They can have their weaker dollar but they’ll lose the benefits from it and I don’t think they’ll accept that easily. Throwing all that away to strengthen your export market is deeply foolish, but the mechanisms at play do work generally as they claim.
So the motherfucker can buy the dip and profit from it - I’m sure is what he’s thinking
And if you’re a rich person it affects your finances essentially zero while hurting consumers far worse.
Not true. Keeping your investments outside of the US while the dollar sinks lets your money go a lot further in the US.
The point being a person with a few billion will still be able to buy pretty much whatever they want while everyone else struggles.
Not the actual worth of the currency.
My point is that they will be even richer in comparison.
@RememberTheApollo_ Is this supposed to be shocking? The man’s concept of business is “Trump Steaks”!!!
He’ll leave the US completely bankrupt and walk away with the billions he grifted on office.
@RememberTheApollo_ He has done it before with a regional airline that he purchased in the 1990’s. It took him only 3 years and in the end he defaulted on the 22 Citicorp bank loans that he used for it’s acquisition!
His 6 bankruptcies … aw what the heck, the American voters trust him!
@[email protected] @[email protected] it will suck
Trump says it’s great, what he thinks is that little girls feel good. Release the Epstein files.
