While a weak dollar may have its drawbacks (for the US), it has been
a boon to US exporters. Not widely discussed because the trade deficit
continues to be enormous (Americans just love to consume crap, and
because of oil prices) but US exports continue to set records, it happened
again last month. While Germany overtook the US in 2003 as the world's
largest exporter (no, it's not China, not yet), the US set an export record
in 2005 and is on pace to do it again this year. The US may also, barely,
regain the top exporter spot over Germany in 2006.
Of course, because Americans are just consuming piglets (the rest of the
world should be thankful) the US also has the world's largest trade
deficit.
US exporters keep praying that the dollar stays low.
Oh, US tourism also prays for a falling dollar.
There's good and bad associated with a surging dollar and
a falling dollar.
http://www.nypost.com/seven/11272006/business/its_play_money_business_paul_tharp.htm
November 27, 2006 -- A depressed dollar is turning Fifth Avenue into a
virtual flea market for global travelers as strong currencies like the
British pound and the euro create a glut of great deals on fashions,
electronics and hot status brands.
New York City is celebrating a record year from foreign tourists hitting
town for weak dollar bargains - reaping savings of about one-third of
what they'd spend back home.
Their bargain boom is fueled by the falling dollar, whose value in the
past year is down 12 percent against the pound and off 10 percent
against the euro, boosting foreign travelers' purchasing power.
The dollar fell last week to its weakest level in 19 months, trading at
$1.31 against the euro and at $1.93 against the pound. Analysts expect
the greenback to slide as much as another 2 percent this week.
For the record 7.3 million foreign tourists expected to visit the Big
Apple this year, the weak dollar is creating savings substantial enough
to nearly pay for the trip itself.
For example, the Microsoft Zune player - a rival to Apple's iPod - sells
for $442 in London but can be found in New York stores for about $249, a
savings of $193. That's about one-third of the price of the lowest New
York-London airfare offered by bookers on the Internet.
Stocking up on shoes and dresses could also cover the typical $300
nightly hotel tab.
A mini-dot jersey dress sells at Saks Fifth Avenue for about $425, but
an equivalent dress would cost about $580 at Selfridges in London. At
Dixons, a popular London electronics retailer, a Panasonic mini
camcorder costs the equivalent of $1,368, but can be bought at J&R near
City Hall for just $999.99.
And it's not only New York City that stands to benefit. European tour
operators are said to be packaging shopping tours for U.S. cities -
including weekend sprees in such hard-core retail destinations as the
Mall of America in Minnesota, the world's largest shopping center -
where three nonstop flights arrive daily from Europe.
"They're giving European travelers any reason they can think of to get
on a plane," said aviation analyst Terry Trippler.
Although New York's economy is cashing in big, with an estimated record
of $24 billion spent in tourist dollars this year, the nation's overall
economy could suffer from the weak greenback.
-Michael
