Like the great American humorist, Samuel Clements ( Mark Twain), reports of the death of the dollar have been highly exaggerated. I follow commentary and developments in the currency markets, and there has been a downbeat attitude about the dollar for years, especially from those who fail to understand the strength of greenback as the ultimate reserve currency.
If we line up the current levels of American unemployment, GDP, budget deficits and the current account deficit, the dollar can be made to look like a pig. The problem, though, is that a currency's value is never a matter of absolute value. It's always about relative value.
Certainly the absolute picture of the American economy is gloomy. But, then, so is almost everybody else on the world stage. In Europe, both the developed and developing nations are worse. Their banking crisis is similar to ours, and their exports are falling fast, as the recession strikes all parts of
Euro/Dollar--Feb 08 to Present
the continent. To read the entire article and see additional graphs, click, here.
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