Newsletter
Dropping Dollar Means More Exports – Including People?
Date: 10/20/2009By Dan Prescher
October 20, 2009 -- Falling almost 20 percent since March, the dropping dollar is good for U.S. exports. But one rising export may be Americans moving abroad.
Low interest rates, a ballooning federal deficit, and pressure from around the world to knock the dollar out of its reserve currency niche are bad news for consumers in the U.S. trying to buy imported goods like German cars, Italian shoes, and Japanese electronics.
But U.S. exporters and manufacturers are watching the dropping dollar with delight, because a dropping dollar makes U.S exports more affordable overseas. They look forward to a weakened dollar making their products cheaper and more competitive on the world market.
However, the U.S. may see the rise of a a new kind of export -- retirees and people living on fixed incomes seeking destinations abroad with lower costs of living.
Millions of Americans have already moved abroad looking for cheaper health care, lower taxes, and better year-around weather to lower utility bills.
As the dollar weakens, its purchasing power will decrease both in the U.S. and around the world. But in many places around the world, the cost of living is 50% or less than it is in the U.S.
If U.S. retirees are forced to take their pensions and keep their savings and investments in dollars, logic dictates that many more of them are likely to seek places where a dropping dollar goes much farther than it does back home.