Strong US Dollar? Pluses and Minuses

A stronger U.S. dollar – hmmmm

The Brookings Institute offers mixed news for our strengthened paper currency;

quoting in part:

“Expectations that interest rates will stay low lead to reduced demand for assets denominated in the domestic currency, and as a result, exchange rate depreciation. With the shift away from quantitative easing in the United States, and its expansion in Japan and the Eurozone, the price of the dollar can be expected to rise even further in relative terms.”  and

“Ongoing exchange realignments and shifting trade balances could become more divisive in future months now that the European Central Bank has joined the Bank of Japan in a large program of monetary expansion. As lagged effects of the exchange rate changes work through the trading system, the negative effects on U.S. growth will become pronounced and competitive tensions over exchange rate policies will rise.”

Fingers crossed  for confidence and appropriate liquidity.

If you have the inclination – read  “The Great Reflation How Investors Can Profit From the New World of Money”  by A. Boeckh. A summary of this provocative read can be viewed @ several sites including http://www.getabstract.com/en/summary/finance/the-great-reflation/14113.

Here’s hope!

Advertisements

About davidefrost

A Vermont Yankee in Southern California.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s