This is a really stupid question for someone who has really read a lot of economics but I am still discombobulated when I read that weaker money will cause increased exports. But isn’t it true that a weaker currency will raise the price of things in a country and so give the people an incentive to buy from everywhere else thereby sending the oppressive currency overseas until a more optimal equilibrium is reached? If anything I always believed that inflation would thereby be increasing imports instead of exports.
There are others far better at economics than I am here so I’m looking forward to new responses.
A weaker currency will be worth less overseas, which makes it profitable for foreigners to then buy your products.
The problem with this is that a developing trade surplus will cause inflation to skyrocket when all those dollars in foreign central banks start flooding into the US.
With the declining dollar, other countries should be less willing to export to the USA and more willing to purchase products made in the USA.
What foils this is that other countries are willing to hold dollars or Treasuries and lose ground to inflation. If foreign central banks are willing to hold paper dollars, then they’re subsidizing the US government.
For example, China doesn’t want to wreck its businesses that export to the USA. China inflates its own currency to keep pace with the inflating dollar. The average person in the USA and China takes the hit; their savings are stolen via inflation.
Also note that a pure gold standard eliminates all “currency arbitrage” and “currency speculation”. The only reason the gold standard failed was that governments printed more paper money than physical gold in their treasury, making them subject to a run.
Your question isn’t stupid at all. Unfortunately it is based on a huge assumption that exports are generally good and imports generally bad for the domestic economy. This assumption is not correct. The assumption is that what is good for exports must also be good for consumers. Sound money and free trade is good for consumers and therefore the rest of the economy. Valueless money has beneficiaries but one of them isn’t the whole economy and consumers are worse off in particular.
(It is actually worse that this as there are a block of folks who believe that the difference in imports and exports can be a good or gad thing. This is really stupid as imports can go up by 75% while exports by 74% but to these bozos the difference, call it a Trade Deficit, has gotten larger when the consumers in the economy are universally better off and suppliers are better off as well. So putting aside trade deficit arguments. We are left with the idea that exports=good and imports=bad.)
Imports and exports are not a domestic supplier vs foreign supplier issue. They are a domestic supplier vs consumer issue. Devaluing money hurts consumers who have fewer suppliers and fewer choices.