Reply #61: A falling dollar isn't always a bad thing, it depends on how much

[Hippo_Tron]

Politicians of both parties like to claim that a strong US dollar is a good thing because claiming that we want a weak dollar doesn't sound good. In fact it sounds downright un-American.

But a cheaper dollar will help balance out the trade deficit which means that China and other countries won't be holding as much of our debt in the future. The flip side is that we simply won't be able to buy as many imports and probably less of US made goods considering that they will be in higher demand overseas and thus their prices will go up.

Considering our trade deficit, a dollar that's falling a bit certainly will certainly benfit us in the future. On the other hand, it will cost us in the short run and thus it's probably good for it not to fall too much.