Comments from a CNBC blog. "Rising gold prices don’t portend doom as they once did. In fact, Cramer said Wednesday, these days they trumpet good news."
"..... expensive gold equals a weak dollar, and that’s good for American business. The lagging greenback keeps our exports cheap, thereby making our companies more competitive overseas. "
My view. Wrong, wrong, wrong! It is the other way around! The dollar is weak because it reflects the lack of competitiveness of most of our industries. Just look at what happened to our auto industry.
Investors are selling dollars (the dollar declines) and buying other currencies (other currencies rise) because they find better opportunities in non-dollar areas of the world.
The dollar will strengthen when our industries become more competitive. The dollar does not strengthen just because our leaders say it should. It is plainly preposterous and shows lack of understanding of what drives currencies!
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Editor, since 1977
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