September 18, 2014
AVERAGE IS OVER...ALL THAT REMAINS IS ABOVE AVERAGE:
The U.S. dollar has been strengthening for 3 straight years! (That's not good news.) (John Aziz | September 16, 2014, The Week)
After listening to naysayers and inflation hawks intone for years that the Federal Reserve's monetary policy would weaken the dollar and spike inflation, it's perversely gratifying to see that -- even after all that money printing -- the dollar has strengthened over the last three years: [see chart]The dollar has been on a particular tear in the last few weeks. This is the ninth straight week where the dollar index has increased on the back of various geopolitical turmoils -- from the ongoing crisis in the Ukraine and the expansion of ISIS in the Middle East to the continuing Eurozone depression and the upcoming referendum on Scottish independence from Britain. As Catherine Evans of Reuters notes, that's the longest streak of weekly gains since 1997.Compared to all that geopolitical turmoil, the United States -- with its moderately growing economy and relatively lower unemployment -- looks like an oasis of calm and prosperity. Money from around the world is flowing into U.S. dollars and dollar-denominated investments.
As the sole safe harbor on the planet, this is only going to accelerate. It's also why we ought not try to balance the budget.
Posted by Orrin Judd at September 18, 2014 6:33 PM
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