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The falling US dollar, falling 25% against many currencies this year, will create a major feast on US industry in the coming months. The slide of the dollar is either applauded by exporters who expect to increase overseas sales or feared by importers who have seen prices skyrocket on imported goods.
But most Americans just yawn at the news, believing they will be unaffected.
One likely result with long-term consequences will be that many US businesses, both large and small, will be acquired by foreign interests.
American companies, valued in US dollars, are now 25% cheaper in terms of Euro dollars than in the past! Already, acquisition scouts are contacting private companies and large public firms are preparing takeover offers for public American companies.
Significant manufacturing operations continue to be exported overseas. If that trend is followed by the wholesale purchase of additional American companies, more control will rest with overseas owners, who are not always friendly toward US interests.
This situation is caused by:
- the Federal Reserve lowering interest rates to record low rates that drive overseas capital back across the oceans where interest rates are higher and
- the record US trade deficit.
The dilemma we now face is that if interest rates are increased to stop the fall of the dollar, our economy will flutter and drop. If the Federal Reserve keeps rates low, the US economy may move along, but the falling dollar will assure that our US based businesses will fall under foreign ownership.
Steve Marr is the former CEO of the fourth largest import-export firm in the U.S., a company which facilitated international trade for many of the largest companies in America. Currently, Steve consults with businesses and ministries utilizing ancient Biblical principles for success in today’s marketplace. Click here to contact Steve, or visit his website at www.businessproverbs.com.
