House of Paine

who be "paying" for the imperial dollars slide ?

  heres a pair 
of dim dames 
hacking 

" a few unconected pieces 
         into a anti weeble feast scold " 


======================================
==========================


 
nyt op ed april 27  2005 
 
"Washington

OVER the last two years
 the value of the dollar
 against the major currencies 
has dropped by more than 25 percent

 so
why haven't we seen
 a narrowing of the trade deficit
now hitting 
new monthly  records at $61 billion?

wheres evidence of  "expenditure switching": 
as the cost of imports rise
 Americans should start 
seeing imports prices rise too
  and buy 
more goods made at home; 
in turn, our exports
 become the foreign currencies
no produce
  more dollars   
  foreigners
  oughta see
prices for american exports 
drop 
 which means foreign demand
 for our products should rise

-------------- unfortunately 
This shift 
in exchange rates
hasn't led
  to the 
 price changes 

and until they do 
the country's trade deficit 
will go on uncorrected ---------------
 

 

 other then oil
our imports have not become 
that much more expensive
 One reason
 about 30 percent 
 of our imports 
come from countries 
whose currencies 
have either
 moved little (the Thai baht)
 stayed stable (the Chinese yuan)
 or 
 actually fallen (the Mexican peso) 
                                against the dollar
 
------------ no no talk to us about the other 70 % -----------------

But theres
another reason

  the worldwide decline 
during the 1990's 
         of  "pass-through rates": 

that is, the rate
 at which  changes
 in the exchange rate 
induce changes 
in a country's 
import and export prices

 the price response  
       to say
    A 10 percent change 
in the dollar 
  over the past 
    two exchange cycles
   has induced  
    only 
         a   2.5  %
 change 
in American import prices 
within the first  quarter

 and at best 
only a 4 percent
            price change
                even after 
                 a year 


----------- now
 theres some good reporting

 pub-ed   on this is near zero
                                 ---------------------


and this time around
   one  study by the Federal Reserve 
found that 
  the pass-through rate 
  has been "  nearly zero"

 Indeed
 in the case of the Japanese yen
 even a 25 percent rise
 in the yen to dollar rate 
has generated little if any 
increase in the price
 we pay for Japanese goods

-----------   how about them nips 

                  can't touch em
   when it comes   to  eatin the grenade.......

by the way
we do 
   nothin  
    on our  end...

 cuttin export prices?

forget about it ....


but hey thats us

US is us right?


thats our bottom line


eerrr
well
 
well

us as  corporate US


its US's  bottom line
                            anyway ------------------- 

Several factors 
help explain America's 
low pass-through rate
 Reduced inflation 
around the world 
has made prices less volatile
 enabling exporters 
to ride out currency fluctuations 
without changing prices


---------- WHAT 

HERE IS A DONKEY STOMP
SENSE HAS BEEN EVACUATED HERE
 IF SAW TOOTHIN HAS A TREND 
IT WILL BE OBSERVED AND ACTIONS TAKEN

  BESIDES CAUSE AND EFFECT ARE HERE CONFLATED
AND AND

OH THIS IS A FOOLS STEW
I'M NOT GOIN TO TRY TO PARSE IT OUT ...===========


 As the United States 
imports more consumer goods 
(which have a lower pass-through rate
 compared with commodities)

---HERE IT COMES
WE PIGGY HOUSEHOLDERS ARE THE CULPRITS

NOT CORPORATE B TO B FORIEGN INPUTS

WE ARE MARKET SLIUGS NOT MOVED 
FAST ENOUGH BY  PRICE CHANGES ----------


-----HERES THE REAL DEAL -----------


 exporters don't want to risk 
losing market share
 in the large and competitive
 American market
 even if that means
 decreasing their own profit margins 
to keep prices stable
 in the United States

--- BUT ON THE OTHER SIDE
AMERICAN EXPORTERS PREFER TO EARN HIGHER DOLLAR RETURNS THEN TPO TRY EXPANDING THEIR FOREIGN MARKET SHARE
AGIN THEIR FOREIGN OLIGOPS 

SO ON BOTH ENDS 
 THE IM EX GAP DON'T GET CLOSED----------------- 

Low pass-through means 
that Americans have not yet 
lost their purchasing power abroad 
despite the dollar depreciation
 and therefore we can continue 
to enjoy living
 beyond our means


------------- SEE ITS US PIGGY POOS FAULT -----------

 Over the long run
 though
 the enormous trade imbalance 
is not sustainable

------------------- MAYBE BUT WHY ? 
WORLD HAS NO IMPERIAL  WIN WINS?

THATS  BULL ----------------


 Low pass-through means 
that it will take 
a much bigger drop 
in the dollar 
to change prices enough 
to induce switching 
and correct the trade deficit

--------- BIGGER OR JUST LONGER
IN FACT MIGHT NOT A LITTLE PATIENCE BE IN ORDER HERE
NOT FURTHER EXCHANGE DROP Rxs--------------------

 In fact
 between the depreciation of the dollar
 and the loss in spending power
 this adjustment could end up 
costing every American $2,350


 The larger
 the eventual depreciation
 and the longer we wait
 the greater our postponed 
                 pain promises to be 

---------------- be scared and ashamed piggy poo 
corporate amerika can only do o much
if we can't restrain our gluttony --------------


Catherine L. Mann is a senior fellow
 and Katharina Plück 
is a research assistant 
at the Institute for International Economic 
  ie
     wally world 
               poop eaters