[jcriddle4]

A 10% drop in currency would in your example, assuming no cost of shipping oil, US would go from 3.00 to 3.30 at 20% drop would mean 3.60 and even a US currency drop of 40% only gets you to $4.20. The data on trade indicates that countries that cheat on trade have epic growth rates and countries that do the "free trade" have close to zero growth or even declines. The data indicates local manufacturing has synergistic effects that massively outweigh the additional costs to consumers. See economist Ha-Joon Chang.

[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...