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Thursday, November 23, 2017
VOLUME -22 NUMBER 9
Front Page News
People in the News
Electronic Mfg. Services
Electronic Mfg. Products
Special Feature: SMT & Production
Product Preview: ATExpo & IPC MW
September 2007 Issue
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Cashing in on the Weak Dollar
Jacob Fattal, Publisher
The U.S. dollar has been in trouble for years, and the recent prime rate cut by Federal Reserve may have made the stock market boom, but it sent the dollar into another tumble against stronger world currencies.
This disparity has been going on for decades, and goes hand-in-glove with the enormous balance-of-payments deficits that the U.S. racks up year after year. These deficits, coupled with a weak dollar, are bad news for the consumer, but are definitely good news for the few remaining domestic manufacturers whose overseas sales benefit from the weakened dollar.
The bargain vacation in Europe or the Far East for Americans is something that hasn't existed since 1960. Today's bargain vacation works in reverse; America is the darling low-cost destination of vacationers from Europe or the Pacific Rim. For them, the U.S. is like a gigantic Wal-Mart because they get so many, many dollars for their Euros or Yen. And fewer Americans are traveling abroad, since their dollar goes a lot farther in the U.S.A., Canada and Mexico. The bright side to all this continues to be the fact that it is good for exports. American goods are cheaper in Europe and Japan.
The opportunity is there for us to export more manufactured goods, and stop exporting jobs. Today, this is easier said than done. Our country has already sent so much of our production capability overseas, that it would take a mighty rebuilding effort to capitalize on the weak dollar. Maybe that's what it requires: capitalization. Invest in capital equipment, and in automation. We have some of the best robotics and automation equipment the world has ever seen, and automation is our answer to that always too cheap 3rd world labor.
Americans have never been afraid of a challenge. The hurdle to overcome now is the tendency to continue to think inside the box. There's a whole big world outside of that box, and it's filled with potential customers for your products. Now is the time to get with the program and export.
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