Saturday, November 06, 2004


Effects of the weak USD

A week ago, NPR's Sound Money had an interview with Chris Low of First Tennessee Bank in which they discussed the effects of a weak US Dollar. A couple points seemed particularly salient.
  • About $0.25 of the cost of a gallon of gas is due to the decline of the dollar over the last 4 years.
  • While US companies with significant foreign revenue are helped by a falling dollar, the majority of US companies, particularly those small businesses which the President is fond of pointing to as the major source of new jobs, are hurt by a weaker currency because raw materials cost more.

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