[nine_zeros]

I wish prices were directly proportional to value of currency. But it isn't.

In the oil price example, drop in value of USD could cause prices of oil to increase (by how much? We don't know. There are entire commodities industries who hire quants to figure this out every day).

Assuming price of oil increases by 10%, price of chicken feed would increase by a%, causing an increase in price of chicken by b%, causing an increase in price of shipping chicken from farm to factory by 10%+a%+b%, the factory whose workers need higher wages now (by a total of c%) because of higher cost of living, factory will now have to sell their chicken for 10%+a%+b%+c% to a shipper who will need to pay another 10% who will pass this cost on to McDonalds who will have to pay 10+a+b+c+10 to get a chicken patty.

The dollar menu suddenly become a $5 menu.

As contrived as this example may sound, this is the reality in many "emerging" markets and smaller developed markets. We are so oblivious to real inflation and price fluctuations simply because we are used to getting stuff for cheap from whereever it is available because we can import any time. No shortages for any industry or any consumers here.

While I agree that having healthy domestic manufacturing is good, we need to be careful what we wish for because losing the reserve currency status is the last option of them all. It's truly devastating and you only need ask United Kingdom and how they lived for decades with rationing in order to pay debts and earn foreign reserves.

[jcriddle4]

The link below is on historical gas prices. Also include a link on US dollar to Euro. Depending on the state we are currently at about 2.50 and have been over 3.50. The dollar menu going to 5 because of a 10% or 20% drop in currency doesn't seem likely. We, and also other countries, can have fairly big currency changes without much internal inflation or deflation(can depend on country size). A number of countries have actually deliberately devalued their currency in order to encourage growth. The question that is more interesting is can we lose high productively jobs(manufacturing...) and still keep high standards of living. The data indicates we cannot.

https://www.statista.com/statistics/204740/retail-price-of-g...

https://www.macrotrends.net/2548/euro-dollar-exchange-rate-h...

[nine_zeros]

Those links don't even go to the dates of US defaults in 70s and 30s.

> We, and also other countries, can have fairly big currency changes without much internal inflation or deflation(can depend on country size). A number of countries have actually deliberately devalued their currency in order to encourage growth.

This is all applicable to the reserve currency or massively exporting countries. Not to importing countries, which the US is. The US cannot stop importing without causing massing inflation at the retail counter. No more $10 t-shirts and $100 sport shoes if they are made here.

I would recommend reading the article to truly understand how subsidized our lifestyle is.