Dollar value going down can be good for us
Walmart says exchange rates hurt profits
This is what I was talking about in the previous post about Outsourcing. Dollar getting stronger can actually be bad for Walmart (and in turn, the US). In other words, as long as Walmart sold only to American customers, yes, it was a problem because every $ spent in Walmart implied a bigger trade deficit for the United States. However, as soon as Walmart started selling internationally, that equation gets reversed. Walmart is now “managed” in the US, has a supply chain from around the world and sells around the world as well. Ideally, what that means is that Walmart is able to buy products the cheapest possible from around the world (China, US or wherever) and sell it for a profit wherever there is a demand for it. And part of those profits come back to Walmart investors who are international as well and to Walmart employees and management, which is international, but mainly based out of the US. In this truly global scenario, the US utilizes its strength - Management prowess, excellent global supply chain management ability and maturity, and availability of capital to finance international growth. That’s what the US should focus on, instead of trying to provide stimulus packages to industries locally to help them manufacture the same goods that China makes for a tenth of the cost.
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