hope this makes sense...the stock market is hurting because of a weaker dollar and the credit crisis...what will it take for the dollar to strengthen? and does the weakening dollar to result of the credit promblems people are having?|||How long will it take for the credit crisis to end? It's taken at least a decade to get in the shape we're in. If we immediately started saving more and spent money more wisely, it would be probably another decade.
American currency weakens because the people who trade currency thinks that the economy supporting the currency isn't healthy.
What constitutes a "healthy" economy?
-Exports. (not necessarily balanced imports/exports but lots of trading with other nations)
-Savings. Americans don't save money, so we have little/nothing to invest in the economy and borrow from others to support our standard of living. Now, not enough borrowers can pay all of the money we borrowed for sub-prime loans. Thus the huge losses and devaluation of our currency.
-Good government finance policies. The government doesn't save money or operate with a balanced budget. Currency traders know this is irresponsible and it drives our currency value down.
-Good government investment decisions. For example, is going to war a better use of government resources than, say, making trade more efficient? Bad decisions drive the value of our currency down.
Address the above-mentioned factors and the currency should strengthen again. But the political will of individuals to get off the easy credit crack pipe is not there.
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