my dear country is about to begin taking its bitter medicine and the affliction will result in a long term and most unpleasant treatment (gross understatement)
the weakening (devaluation) of the dollar will force us to deal with our imbalanced trade (current account deficit)by making imports more expensive...like a tariff... only no income goes to uncle sam
a strengthening currency entitles the bearer to a greater share of the goods and services produced by a country that has a comparatively weakened currency
china, with a strengthening currency and economy none the less faces a number of future liabilities
first they hold maybe around one trillion dollars of their reserves as dollars or dollar denominated securities....the value of which is rapidly declining
second their country is "geared" towards being an exporting economy not a consumer economy, they will no doubt transition
we
the usa
are lucky that we have all our international "debts" (japan saudi britain and china hold the lions share)
all these debts are dollar denominated
by contrast poor argentia for instance owed a ton of money denominated in dollars
when their currency went bust
their debt was magnified...ouch
but as the value of the dollar drops, people around the world will be looking to either spend their dollars on real things or get out of dollars thus driving further the dollars decline
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