some positive economic thoughts

Some thoughts from my educated and smart friend Lynda P - whose economic reflections are often somewhat alarming - words of hope?

A rambling look at my economic brain in action.

I find it interesting that the dollar is so high compared to the rest of the world. The Libyan dinar (.80), Behrain (2.65), Kawaiti Dinar (3.55), Jordanian Dinar (1.41), Omani Rial (2.59), Turkish Lira (.64), British Pound (1.56), Bulgarian Lev (.68), The Euro (1.33), Latvian Lats (1.88), Australian Dollar (1.01), Brunei (.77), Fiji (.54), New Zealand (.77), Singapore (.78), Bahamian dollar (1.01), Bermudan dollar (.99), Brazil (.60), Canada (1.01), Cayman Islands (1.21), Cuban Peso (1.00), Netherlands (.55), Panama (1.00).  All other countries are under .50 to the dollar and most are under .10 per dollar.  I can see the reduction of the dollar giving us massive inflation in our imports but do not see how we can easily fall so far as to be worthless if the Philippines at .02 per dollar is still a functioning money.  Granted, the Philippines is a third world where 40% of its citizens make under $2 per day and it does not have an entitlement class.

Perhaps the problem isn’t the dollar in comparison but the dollar compared to the dollar debts.  No matter how we rate compared to other countries-if we are bankrupt, we are bankrupt.  But . . . that should show in the exchange rates.  Does that mean we are all bankrupt? or at least almost all of us?

As the dollar falls we become a great tourist destination.  We are still one of the safest places in the world to visit.  We are a society of servers (now doesn’t that sound 3^rd world?) in a service jobs economy.  Our hotels are some of the cheapest in the world.  Our natural beauties are unique and plentiful and well preserved in a world so filled with people and destroyed nature.  The lowering of the dollar is good for what we have to offer since we no longer have manufacturing.  It will hurt our gas prices-but they are so far below what the rest of the traveling world is used to paying that a significant rise will mean little to them. I saw this personally when we went to Disneyland last year amidst crowds of Australians who said it was cheaper to fly here and do things here then stay home and do them in Australia.

If the government can refrain from adding huge taxes and regulations, the lowering dollar will make our exports more attractive and should jump start new manufacturing (so long as it doesn’t price out the core production commodities). 

Compared to most of the rest of the world, it seems we have a long way we can fall before it kills the dollar-but the fall will create a significant change in our standard of living.  In our spoiled society that will probably not be accepted without unrest, particularly among the “entitled” whose government checks will soon only cover food and housing instead of all the liquor, drugs, televisions, cable, cell phones, etc that they have been spoiled with from other’s labors.  Really, the biggest danger to our society is the large number of people who expect toys and pleasures as well as food and housing for doing absolutely nothing.

The reality is that it would do us all good to have less material things-the excess of which can be seen around most the waists of America (including my own)  We could do with less of our exorbitantly sized homes, bells and whistles vehicles, fancy furniture, endless gadgets, endless tech, etc.  Think how green that change would be to our nation and others.  Not only would our trade deficit be reduced dramatically, we would have less in the dump because we would buy less but better while using things longer, less pollution because we would produce less and drive less, and perhaps more time with our families planting our back yards with food instead of just looking at the thirsty green grass. 

If the government can just get out of the way with taxes and regulations, this could actually be a very good thing.

Do you have an opposing opinion?  See something I am missing?

I know, I know.  Get up off the floor now.  I actually said something good about the current economic situation.