The dollar keeps sinking. No one seems interested in its disastrous trend.
Reasons for its weakness.
Lack of competitive advantage of most of our industries.
Low overall productivity growth.
Rising wages and rising labor costs adjusted by productivity, forcing profits to grow more slowly.
Increasing regulations concerning who is allowed to buy our assets (also known as creeping protectionism). Either the buyer is unwelcome or the assets are too important for our country, or both.
Our economy is slowing down and its growth rate is well below that of other countries.
Why should large investors be interested in selling their currencies to buy dollars to invest in the USA under these circumstances?
Mr. Paulson's call favoring a strong dollar is meaningless unless the above trends are reversed.
A weak dollar is the main reason for the strength of commodities (which are denominated in US dollars). More details in the following blogs.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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