Baltimore Business Daily

What would happen if the USA de-valued its currency on purpose to increase its exports?

China lowers the international value of its currency so that its exports are super-cheap! The USA used to have currency backed by gold (see the Bretton Woods Agreements) but now market fundamentals MAY finally be catching up with the USA. (Maybe. Maybe not.) Exporting more than we import would certainly help the economy in the long term.

Public Comments

1. China's economy differs from the US in that it relies heavily upon its exports...
2. I think you should be very careful about that because our economy, as the last person said, doesn't depend upon manufacturing products and exporting them overseas as our economy has more concentration on other industries such as finance, or technology development. In other words, we have a larger skilled workforce. Devaluing the currency actually hurts because it decreases our purchasing powers. In other words, we don't produce in our country, but we use the inputs that we buy to do more productive things such as technology development, as I said.
3. Inflation is devaluating the dollar every day, but its a two-edged sword. The purchasing power of your dollars go down, your budget gets stretched a little tighter. People on fixed incomes have to cut back. People with any incomes have to cut back. Foreign countries with trillions of $US find they are worth less. Grandpa