# When Will The Weak US Dollars REsult in Higher Prices? **URL:** \ **Category:** Great Debates\ **Created:** [December 7, 2007, 1:36am UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098 "2007-12-07T01:36:12Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 7, 2007, 1:36am UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/1 "2007-12-07T01:36:12Z")
I don’t see the price of imported Chinese goods going up at all…in fact, cashmere sweaters (imported from China) cost less now that they did 4 years ago. Likewise for electronic goods-the price seems to keep going down. So: are the Chinese prepared to keep ther prices low? Will this prevent any revival of US-based manufacturing? ---
**Author:** ![hawthorne](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@hawthorne](https://boards.straightdope.com/u/hawthorne)\ **Post date:** [December 7, 2007, 1:04pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/2 "2007-12-07T13:04:30Z")
Good question. First, for various reasons, the depreciation against the Yuan/ rénmínbì is rather less than against other currencies. Over the last 5 years, the $US has depreciated around 30% against the Euro but only around 10% against the Yuan. Maybe this is partly a reflection of an undervalued Yuan, but let’s not go there at present. Second, China is experiencing rapid industrialisation. This means great productivity increases as well as mere capital accumulation. It’s not so much that China’s keeping prices low, more that costs are plummeting. Third, a big proportion of the prices of imported goods doesn’t depend on the price of imports. The price of an imported good on the shelf at your shop depends on what economists (at least of my type) call _margins_. These are costly things that facilitate sales of goods - like transport, warehousing, insurance, financial services and retailing. To give you a number I’m familiar with, in the Australian Textiles, Clothing and Footwear industry, fully 50% of the price that consumers pay is margins. For small manufactured items in the US, the margin component could well be a fair bit higher. For 50% margins, a 10% increase in the landed, duty paid import price translates into a 5% increase in purchasers’ prices (other things equal). Fourth, domestic and imported variants of fairly similar goods don’t seem to be perfect substitutes. If it took a fair bit of price difference to win over US customers, its probably going to take a fair bit to lose them. So, where does that leave US manufacturing? It’s a lessening of import pressure, to be sure, but it’s still very tough times. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 8, 2007, 3:15pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/3 "2007-12-08T15:15:12Z")
You correct. I also suspect that the Chinese are administering the coup de grace to US manufacturing-you cannot buy American made clothing any more here. i guess that’s it-we will be dependent upon China for everyhting. 😕 ---
**Author:** ![Desert\_Nomad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/desert_nomad/32/177_2.png) [@Desert\_Nomad](https://boards.straightdope.com/u/Desert_Nomad)\ **Post date:** [December 8, 2007, 4:56pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/4 "2007-12-08T16:56:54Z")
Is already has. My company raised USD prices several months ago because of the falling dollar. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [December 8, 2007, 6:52pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/5 "2007-12-08T18:52:01Z")
Maybe stuff from China doesn’t cost more, but a whole lot of other stuff sure does! ---
**Author:** ![NurseCarmen](https://avatars.discourse-cdn.com/v4/letter/n/5daacb/32.png) [@NurseCarmen](https://boards.straightdope.com/u/NurseCarmen)\ **Post date:** [December 8, 2007, 7:48pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/6 "2007-12-08T19:48:11Z")
It’s part of the reason Oil is more expensive for us. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 8, 2007, 10:42pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/7 "2007-12-08T22:42:40Z")
[QUOTE=ralph124c] You correct. I also suspect that the Chinese are administering the coup de grace to US manufacturing-you cannot buy American made clothing any more here. i guess that’s it-we will be dependent upon China for everyhting. 😕 [/QUOTE] Manufacturing has been leaving the United States for the past 30 years. Unemployment, however, has remained steady. One must ask, is manufacturing somehow a more legitimate industry than others? Also, American Apparel manufactures their clothes in the US. [QUOTE=NurseCarmen] It’s part of the reason Oil is more expensive for us. [/QUOTE] What is the reason and for who? Oil is getting more expensive simply because worldwide demand is increasing while drilling and refining capacity is not. ---
**Author:** ![Zoe](https://avatars.discourse-cdn.com/v4/letter/z/a4c791/32.png) [@Zoe](https://boards.straightdope.com/u/Zoe)\ **Post date:** [December 9, 2007, 2:20am UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/8 "2007-12-09T02:20:44Z")
Meanwhile, Europeans are taking advantage of our devalued dollar. They fly to our cities to do their Christmas shopping. The money they save pays for their tickets. ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [December 9, 2007, 3:35am UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/9 "2007-12-09T03:35:58Z")
[QUOTE=Zoe] Meanwhile, Europeans are taking advantage of our devalued dollar. They fly to our cities to do their Christmas shopping. The money they save pays for their tickets. [/QUOTE] Wonderful. My country has become a Cheap Shopping Destination, and visiting Europe is far out of reach of almost everyone here. ---
**Author:** ![Sri\_Theo](https://avatars.discourse-cdn.com/v4/letter/s/f04885/32.png) [@Sri\_Theo](https://boards.straightdope.com/u/Sri_Theo)\ **Post date:** [December 9, 2007, 3:55pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/10 "2007-12-09T15:55:28Z")
Hey man, you can’t claim that Americans have never taken advantage of the same circumstances in other countries. You practically invented the game. ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [December 10, 2007, 2:26am UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/11 "2007-12-10T02:26:41Z")
[QUOTE=Sri Theo] Hey man, you can’t claim that Americans have never taken advantage of the same circumstances in other countries. You practically invented the game. [/QUOTE] Two or three generations ago, maybe. That doesn’t help me now. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [December 10, 2007, 2:53am UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/12 "2007-12-10T02:53:55Z")
[QUOTE=Zoe] Meanwhile, Europeans are taking advantage of our devalued dollar. They fly to our cities to do their Christmas shopping. The money they save pays for their tickets. [/QUOTE] Would that 'twere so. But [it seems that our stringent security measures may be keeping them away](http://www.newsweek.com/id/70991): > [@](#): > > According to the Commerce Department, the United States is the only major country in the world to which travel has declined in the midst of a global tourism boom. And this is not about Arabs or Muslims. The number of Japanese visiting the United States declined from 5 million in 2000 to 3.6 million last year. The numbers have begun to increase, but by 2010 they’re still projected to be 19 percent below 2000 levels. During this same span (2000–2010), global tourism is expected to grow by 44 percent. > > The most striking statistic involves tourists from Great Britain. These are people from America’s closest ally, the overwhelming majority of them white Anglos with names like Smith and Jones. For Brits, the United States these days is Filene’s Basement. The pound is worth $2, a 47 percent increase in six years. And yet, between 2000 and 2006, the number of Britons visiting America declined by 11 percent. In that same period British travel to India went up 102 percent, to New Zealand 106 percent, to Turkey 82 percent and to the Caribbean 31 percent. If you’re wondering why, read the polls or any travelogue on a British Web site. They are filled with horror stories about the inconvenience and indignity of traveling to America. ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [December 13, 2007, 2:14pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/13 "2007-12-13T14:14:58Z")
Sounds like it’s starting: [Wholesale prices, retail sales jump](http://news.yahoo.com/s/ap/20071213/ap_on_bi_go_ec_fi/economy_rdp_1) > [@](#): > > Wholesale prices shot up 3.2 percent, the biggest jump in 34 years, propelled by a record rise in gasoline prices. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [December 13, 2007, 2:32pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/14 "2007-12-13T14:32:09Z")
[QUOTE=Squink] Sounds like it’s starting: [Wholesale prices, retail sales jump](http://news.yahoo.com/s/ap/20071213/ap_on_bi_go_ec_fi/economy_rdp_1) [/QUOTE] 3.2% in _one month_? (!) Am I reading that right? ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [December 13, 2007, 3:01pm UTC](https://boards.straightdope.com/t/when-will-the-weak-us-dollars-result-in-higher-prices/429098/15 "2007-12-13T15:01:27Z")
[QUOTE=spoke-] 3.2% in _one month_? (!) Am I reading that right? [/QUOTE] Yup. The article never did mention whether that was the yearly rate or not, did it? From [Forbes](http://www.forbes.com/markets/2007/12/13/briefing-lehman-dow-markets-equity-cx_er_1213markets06.html): > [@](#): > > The Producer Price Index jumped 3.2%, which was more than double expectations. The core index rose a much more modest 0.4%, but that was also well above the Street’s call of 0.2%. High inflation could force the Fed to pull back on future rate cuts. Just FYI, 3.2 X 12 = 38.4. I remember 73-74 as a poor college student. Inflationwise, it was _not_ a good time.