This is all part of the effort of non-residents to no longer accumulate $70 billion per month of US financial assets.

The USD goes down as they try to sell USD to each other at lower and lower prices and doesn’t stop until levels are reached where it makes sense to spend the USD here. That’s the only way the net accumulation can be reduced.

Here is BMW is buying US labor content in parts and finished products.

The US has become a substantial and growing auto exporter.

Exports continue to pick up much of the slack from the housing market, as GDP muddles through.

And the Fed thinks this is a good thing. Bernanke stated in from of Congress that he’d like to see exports and investment (in export businesses) drive US GDP rather than consumption.

If the trade gap goes to zero, trade could be adding about another 2% to US demand/GDP.

BMW plans to increase US production while cutting workers in Germany

by Page Ivey

On one side of the Atlantic Ocean, BMW says it will cut 7.5 percent of its work force over two years. On this side of the water, the company says it plans to increase production by more than 50 percent by 2012.

“This is completely driven by the plunge in the dollar,” said Greg Gardner with Oliver Wyman, publisher of the Harbour Report on automotive manufacturing activity. “It is untenable to produce at a much higher cost in Germany.”

The euro climbed to record heights Friday, reaching $1.5463 before falling back to $1.5335 in late trading after the Federal Reserve announced it would provide more cash to banks that need it. That means European goods cost more for Americans to buy.

By building the cars in the U.S., BMW can save money on the lower dollar and on wages since its South Carolina workers make less than German workers, Gardner said.

The declining dollar also means BMW and other foreign automakers likely will start buying locally for more of the parts used by their U.S. plants, he said.