U.S. Dollar's Freefall Impacts Everywhere

Take this for example, from Lesotho in S Africa:

Buy a T-shirt at Wal-Mart, fleece sweats at J. C. Penney or Hanes panties anywhere in the United States, and there's a halfway decent chance that they were stitched together here, in an acre-size garment factory crammed with thousands of frantically clacking sewing machines. Virtually its entire output, 25,000 items of clothing daily, is America-bound.

These days, that is a disaster. "Two thousand people work here, and unfortunately last week I had to retrench 500 people, because there are no orders," Boodia Heman, director of the Ever Unison Garments factory, said in a recent interview. "The American buyer is not coming to Lesotho to buy."

Actually, the problem is not so much the buyers from America. It is the American dollar, and its headlong plunge in value. Three years ago, Lesotho's garment factories had to sell only $56 worth of clothes to stores in the United States to cover the monthly wage of 650 maloti for a sewing-machine operator. Today, that same salary consumes $109 in sales.