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Originally Posted by Dragoneye
A prime component in this whole gas crunch thing that very few people realize/remember/whatever is the value of the US dollar. In case nobody's noticed...it's dropped; SIGNIFICANTLY. If you only look at the Canada/US exchange rate, we've experienced a 33% drop in buying power. That includes Fuel. But some claim that the drop in value has benifited other sectors of the economy, contributing to the well-being of the economy as a whole. I'm no economist, so I couldn't tell you what those sectors are.
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Well, good news there. While the weak dollar is hurting us in many ways, including gas prices, it is helping the auto companies and the auto industry in America. It is attractive now for American auto companies to build cars here and ship them abroad to say...Europe. Since they'll be cost valued in dollars, they'll appear very cheap to the Europeans, leading to increased demand. That's one reason GM's global demand is actually doing quite well right now (and keeping them afloat while the North American market sinks). It is also good for anyone in the manufacturing business because it is now cheaper to produce goods in America and ship them out. Have you noticed that a lot of foreign car companies are building more of their American market cars right here? Some of that has to do with building a favorable image with Americans and trade laws, but the weak dollar also helps, as foreign made goods shipped here are now more expensive. Its all a bit of a silver lining to an otherwise pretty dark cloud.