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A Strong U.S. Dollar Weighs on the World

nytimes.com

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Re: A Strong U.S. Dollar Weighs on the World

#21

Post by codexb »

avidiax wrote: post #3

Seems strange that the US printed lots of money, which caused inflation, which caused high interest rates, and now causes a strong dollar. You wouldn't think that printing money leads to a stronger currency, but perhaps this is a delayed effect after you stop printing.

They're somewhat unrelated, because while there's more dollars, the domestic demand for those dollars is also higher now, for lots of reasons. Inflation, the high amount of American debt (which must be paid in dollars), the looming threat of a recession, which entices Americans to save (and they'd prefer to save in dollars and not some other currency).

It says a lot more about the preferences of Americans that it does about any of the other countries.

Re: A Strong U.S. Dollar Weighs on the World

#22

Post by [deleted] »

avidiax wrote: post #3

Seems strange that the US printed lots of money, which caused inflation, which caused high interest rates, and now causes a strong dollar. You wouldn't think that printing money leads to a stronger currency, but perhaps this is a delayed effect after you stop printing.

[deleted]

Re: A Strong U.S. Dollar Weighs on the World

#23

Post by roenxi »

This is one of those instances where technical language is misleading. The US dollar is indeed "strong", but it still buys less stuff than it did last year. The gold price is not impressed by this sort of strength. The news is interesting more as commentary on relative policy positions of central banks around monetary supply and how much of that is leaking into international trade.

On that topic; I've been watching the US Treasury's "Major Foreign Holders of Treasury Securities" [0] with some interest. There are some very big strategic changes afoot; China doesn't seem particularly willing to take US debt any more. They'd going to be 3rd largest holder soon and now hold less than 10% of the outstanding US treasury debt.

[0] https://ticdata.treasury.gov/resource-center/data-chart-cent...

Re: A Strong U.S. Dollar Weighs on the World

#24

Post by CalRobert »

po wrote: post #15

> The yen is at a 34-year low against the U.S. dollar I live in Japan and this has happened so quickly it's been stunning. While not much has changed domestically so far, I am hearing and starting to see foreign people question whether they could work and live here long term if it stays like this. It's fine if you are earning USD and visiting Japan (wow there are so many tourists this year) but if your salary is pric…

I have a similar concern as an American living in Europe for the last ten years. It was OK-ish when I could work remote and price myself in USD but given the softness in the software job market and the very weak Euro (combined with very low pay in Europe in general) it does make it harder to consider ever being able to move back.

Re: A Strong U.S. Dollar Weighs on the World

#26

Post by pineaux »

avidiax wrote: post #3

Seems strange that the US printed lots of money, which caused inflation, which caused high interest rates, and now causes a strong dollar. You wouldn't think that printing money leads to a stronger currency, but perhaps this is a delayed effect after you stop printing.

You should read "the global minotaur" by yanis varoufakis. It explains exactly why this is the case. This is true only for the US and it is because other countries buy dollars in bulk to keep the dollar high because: 1) not keeping the dollar high will devalue their dollar reserves. 2) they need large reserves of dollars to be able to facilitate trade in dollar denominated resources like oil. 3) they buy us treasury bonds because this will raise the value of their dollars and because it ks historically a safe investment.

Re: A Strong U.S. Dollar Weighs on the World

#28

Post by fractalb »

cherryteastain wrote: post #19
avidiax wrote: post #3

Seems strange that the US printed lots of money, which caused inflation, which caused high interest rates, and now causes a strong dollar. You wouldn't think that printing money leads to a stronger currency, but perhaps this is a delayed effect after you stop printing.

US printing is not the same as everyone else printing. Almost all trade deals worldwide are done in USD. Everyone except the US must export goods and services (i.e. actually work) to acquire the dollars which will finance their imports; US can just print. Goods and services that are traded internationally are priced in USD. Other currencies do not end up directly representing goods and services; they are relative to…

> US can just print. How does that work? All the world’s economy is just equal to the US paper? Really?

Re: A Strong U.S. Dollar Weighs on the World

#30

Post by bamboozled »

po wrote: post #15

> The yen is at a 34-year low against the U.S. dollar I live in Japan and this has happened so quickly it's been stunning. While not much has changed domestically so far, I am hearing and starting to see foreign people question whether they could work and live here long term if it stays like this. It's fine if you are earning USD and visiting Japan (wow there are so many tourists this year) but if your salary is pric…

you can borrow JPY and invest in USD and make 4-5% on it.

I have JPY, can I make money on it, or do I need to borrow it? Is the idea here to buy USD, wait for the price to go up, and then sell it back in JPY?

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