The dollar is strong not because of Trichet's comments. Not because of interest rates differentials (Europe and the UK have much higher interest rates than we have).
The reason is that our assets are compellingly cheap. They are a great buy for overseas investors.
Our country is on sale because of the bad policies of the past. Investors are swarming the US to buy, buy, buy. This is good news because is going to reflate an economy on the verge of disaster.
The idea that our exports are going to be more expensive is true, but the reason the dollar is strong -- if it continues -- is because we are becoming a stronger country -- economically, of course. So, we should not fear the impact of the strong dollar on exports.
A strong currency is a blessing and something we should strive to achieve. We should welcome foreign investors.
More, much more when you subscribe to The Peter Dag Portfolio on https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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