Monday, March 10, 2008

BMW & the Dollar

This quarter I found myself researching a term paper about the declining value of the American dollar, how it is bigger problem than we think, and what steps need to be taken to correct it before its plummet gets out of hand. I was surprised to learn that some in the Bush administration and Federal Reserve actually wanted a weaker dollar. I will not bore you with the details and analysis, but today I stumbled upon a very interesting small story that has altered my outlook:

  • The United States has been suffering from a growing trade deficit as companies move operations to a cheaper and less regulated countries.
  • With the now declining value of the American dollar, companies such as BMW are increasing production in the United States, bringing jobs back here and spending more money within the country. This is good for our otherwise slumping economy.