What are the problems with the US ecomony when the US dollar is low?

[mattd5690]

When the US dollar is low what effects does it have on the US ecomony

[i_am_me]

It just means that we've got a biased media and inflation-which is natural.

[econgal]

The up swing of the weakened dollar is that are exports will increase since they are prices in "cheap" American dollars. Our import behavior will be put in check since foreign goods will now become more expensive. A serious consequence is the reduction in foreign investment in U.S. government securities since these will now have lower rates of returns due to lower interest rates compounded by "coupon" payments showing up in the form of weak dollars. Thus these investments become less appealing.

[fixn2rock]

I would say all it is, is that the rest of the world is catching up to the U.S.'s economy because they are becoming more competitive in a global marketplace. And the U.S is doing little to change. Now we call customer service because our fridge went on the fritz and someone in India is helping us with our problem. Why? Because they do it cheaper.

[Manny]

Econgal hit a large portion of 'what's wrong'
The sub-prime market hit us hard and lending/credit has dried up. This affects purchasing of majors assets and hurts some investment from foreign nations.
You have to remember though that the devaluation of the dollar was an intentional one after the near recession from 9/11. Granted the devaluation probably has gone a bit farther than many would like, however, our deficit and foreign debt has actually gone DOWN the last couple of years because of the tax breaks a few years ago and the businesses who were encouraged by those breaks increasing business who are now able to export goods basically unencumbered by competition from other major nations. I know most media outlets don't report that because it's not 'cool' to make anything seem good.
Don't be surprised to see a correction in the next 6-8 months. The Euro Central Bank was set to decrease interest rates but they look like they are going to try to ride out one more cycle standing pat or even increasing modestly in an attempt to draw more foreign investment (which could backfire horribly if the sub-prime exposure in the Euro zone is bigger than banks there are letting on)
Once they ride that out, expect to see them drop rates and the dollar strengthen again because Europe can't have as large an inequity in trade as they do now especially with the GIANT unemployment numbers they have combined with what are largely 'nanny state' model governments that are asked to pour out billions upon billions in social services payments each year.
If you are really worried, invest in emerging markets. They have little exposure to the "Western problems' hitting the US and Europe right now and should continue growing. I'd stay away from China and Hong Kong right now. They are strong but they are due to correct and China being run the way it is can and has pulled the plug intentionally on their economy to keep their citizenry 'subservient' it's tricky waters there. Hong Kong is dicey because they are set to become part of China again in about 30 years, but China has eyes on making it earlier which will severely hurt their market.
In short see where we are at in another year once the subprime mess has settled and then ask these questions. There are a few too many uncertainties for anyone to answer with 100% certainty.