It is unbelievable. People do not understand that currencies reflect productivity differentials between economic areas.
The yen is strong because Japan is a very efficient country. Like Germany. Like Sweden. Like South Korea. Like Taiwan.
What all these countries have in common is a surplus in the current account balance. It is their efficiency that creates a strong currency. A strong country economically has a strong currency.
Exporters of efficient countries create a strong currency because people want to buy their products. Buyers sell their currency to buy the currency of the seller.
By doing so they weaken the currency of the buyer and strengthen the currency of the seller.
The country with most competitive industries has the strong currency.
Countries or central banks do not make their currency weak. It is their lack of productivity and poor economic management that make their currency weak!
More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest
To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.
Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
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