Arguments for a strong dollar

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switters's picture
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Arguments for a strong dollar

In Charles Hugh Smith's latest blog post, he includes arguments from other analysts which he calls "persuasive" for a strengthening dollar over the coming months and years.   

CPI-adjusted terms. Adjusted for the price of gold, similarly adjusted for the US$ and CPI, the US$ fell 76%. The US$ fell even more in the early '80s adjusted for CPI and gold. In effect, we've had two colossal US$ crashes in less than 30 years. (emphasis added, CHS)

(While many would say that we have emerged relatively unscathed from each episode to date, a closer examination of the underlying productive structure of the economy, and what the Austrians refer to as the "pool of funding", and the situation is much more dire than it appears on the surface.)

Then consider what would happen to the euro were the US$ Index to fall, say, another 50% from ~80. The euro would effectively double to the 2.80s, plunging the European production and export sectors further into a deeper hole than today. And the doubling or more of commodities prices would very likely imply a further decline in global economic activity.

The entire post is available here.
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