From: Instapundit.com

WEAK DOLLAR UPDATE: “With the dollar as weak as ever, European companies are trying to avoid disaster. Factories in North American are becoming more attractive, and over the weekend, both Airbus and VW hinted they might take the plunge.” Hmm.

UPDATE: Reader Jim Dunn emails:
Greetings, Prof. Reynolds. I saw your post on the weak dollar possibly leading to foreign manufacturers building plants in the U.S., but I wanted to point out that the Spiegel Online article you linked to erred in one respect. (I write for Business Alabama magazine, so it’s my job to know about these things.) Airbus is hoping to land the Air Force tanker replacement contract, true, but that’s been known for a while. What’s new is that they’re now considering building passenger aircraft in Mobile, Alabama, as The Birmingham News reported. Here’s a link to that story.

Also, I have to point out that German steelmaking giant ThyssenKrupp is already building a massive new facility in the Mobile area that will cost around $4 billion.
A weaker dollar is not all bad.

The weakness of the dollar intruigues me. Why is it weak? Efficent Market Theory says that its not weak because all our bad decisions are catching up with us, since we’ve known that these decisions are bad for awhile and smart investors would have begun shorting the dollar long ago. The dollar’s slide began in earnest roughly two years ago. Its not due to the Fed printing more money or we’d be seeing higher inflation. Very little has been said about this thats not blantent political demogauging.

I have a theory as to why the dollar is weakening, but I’m not yet ready to publish it. It needs more research. However, if my theory is right, then this trend towards more manufacturing moving _to_ the US is a perfect example of the invisible hand, and free markets correcting themselves.