Nikola

A Strong, Stable Dollar Is Best for America

I don't think that Carl is implying that a strong currency will CAUSE a better economy, I think he is trying to say that the current policy of WEAK dollar will CAUSE a worse economy. You can't declare your currency strong. But you CAN wish your currency weak. How? Oh... I don't know.... how about by having your government overspending gazzilions of said currency, and borrowing like there is no tomorrow and printing money (Fed buying Treasuries). And spending a good chunk of it on unproductive activities like wars in Iraq and Afghanistan and ponzi schemes. AND THEN, when your currency goes down a bit, saying you don't really care, in fact, you are glad it did.

What happens is that your bankers start to worry, which CAUSES them to give you less money, under more and more unfavorable terms, which CAUSES your currency to go down even further, which CAUSES your economy to take quite a beating for the reasons which Carl explains, or .... at the very least because now you can't borrow more, you owe a whole lot, and you can't invest into anything new and productive.

Yes, you can then, if you are bold, employ hundreds of millions to make doorknobs, toothpaste, T-shirts and shoes and improve their living standard from official UN poverty level ($1/day) to a solid middle class making $12,000 2009 dollars per year.

If your vision of America's future is China's past (starvation, failed "economic" experiments and Cultural Revolutions), and you are happy that you will be able to recover from that just like China (sweatshops and human rights abuses), then, well, I don't think we have much left to discuss.