>There is a reason that Paul Ryan wants to increase the value of the
>US$ and scare everyone with the inflation boogieman, because it would
>help capitalists.
Just as devaluation helps debtors by allowing them to pay back the fixed-rate debt with devalued dollars, making it easier to pay that debt off. So if capital is really in charge, why all the devaluation?
Percy
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Wouldn't deflation of the dollar increase US export competitiveness?
How exactly would an increase in the value of the dollar help US
workers? The reason that corporations like a high US dollar is
because they can purchase more assets and MOP overseas. Having the
dollar high means they get more factories in China and more workers in
Bangladesh for their dollar. Capitalists fear devaluation because the
money they have will be worth less. Flip that around to those who
don't have money but have debt and I don't see how it hurts them.
The devaluation, according to bourgeois press, is due to the high debt of the US government. Meaning, we need to cut programs and balance the books in order to keep the currency from being debased (as Ryan put it the other day when he was attacking Bernake). I think capitalists and politicians understand both sides of the issue - they know that US manufacturing and the US debt would be helped by deflation of the dollars value, they also know that they are in a better position against global competitors when purchasing and investing overseas by a high dollar. Most importantly they know that they can use the issue to scare the public and muddy the waters over what the real issues are.
Brad