Sunday, September 23, 2007

WSJ on weakening dollar

Please go to two posts earlier for the blogger dinner/party RSVP's for September 30th.

Its a very real world example that makes sense, but I never expect the WSJ to use strippers as an example of how a weakening dollar can effect a US 'industry.'

or a more direct link:

Canada Is Giddy

The owner of five strip clubs in Detroit and Windsor, Ontario, says American dancers are heading to Canada to earn the strengthened Canadian currency, and Canadian customers are heading to Detroit because their dollars go further there.

Later in the article:
Economists fear that Canadian exporters will face an uphill battle since their goods just became more expensive. For Canadians living in the U.S. who are paid in U.S. dollars, it's also not such great news.

and still later:
Mr. Katzman, the Windsor strip-club owner, is philosophical. He says that, last year, 90% of his dancers were Canadians. About 200 of them drove down from Toronto and Montreal to take advantage of the U.S. dollars American men typically paid with.

This year, he has more American women dancing in his Canadian clubs -- about 160 -- than he has Canadians.

Umm... yea... this could be impacting immigration trends. ;)

So let's see... weaker dollar means higher cost services in the US, 'workers' leave the US and probably smaller imports. And people who export to us are going to have a much tougher time. And my wife wonders why I agreed so readily to buy her imported Christmas gift... today.

Not if we can get the Yuan to float. Cest la vie. Either way, I'm predicting a drop in the imbalance of payments in 2008.

Got popcorn?


Anonymous said...

There is a crystal clear message embedded in that article, and everyone should pay close attention to it: The Wall Street Journal, historically the bastion of financial probity, is scared out of its gourd.

That article trivializes an outright collapse in the dollar caused by the Federal Reserve's unrestrained money creation. Hyper-inflation is coming, and the Wall Street Journal can point to nothing more significant than strippers on the Canadian border?

Don't take that article at face value. Instead, ponder why the WSJ decided to give a subject that goes straight to the heart of the U.S. economic and financial system that sort of treatment.

wannabuy said...


I agree with you except I don't think the article trivializes anything. I think the subject matter is simply too scary to get anyone to accept heads on. Thus, they explain the problem and let the reader come to the conclusion.


Problem: Hyper-inflation requires wage inflation. That isn't about to happen. So we're in for something new. Why? Too many REIC searching for employment.

Got popcorn?