Our dollar is causing problems. I'll try to explain. As our interest rates rise buying of our Treasuries has soared. That is dollars LEAVING countries and finding a home here. This pushes UP the face value of Treasuries but pushes DOWN interest rates. This can only be offset by the FED raising rates more. Our yields are attractive.
Consider a 10 year Treasury in America is paying 3.2%
Germany 1.1 %
Japan .025%
Where do you think the money will go. Demand for dollar demoninated Treasuries is causing our dollar to rise to levels that begin to HARM other countries economies and MAKE IT MORE EXPENSIVE to buy goods (INFLATION ) for you global inflation people.
Because oil and commodities are priced in US DOLLARS!
So as our dollar strengthens it takes more and more to buy the same basket of goods.
Especially hard hit are emerging market countries.
CONVERSELY a strong dollar usually makes IMPORTED goods LESS expensive for Americans.
It does hurt USA exporters.
This is NOT without risks to our economy! It is NOT always good to have our dollar too strong.
www.morganstanley.com
realeconomy.rsmus.com
Consider a 10 year Treasury in America is paying 3.2%
Germany 1.1 %
Japan .025%
Where do you think the money will go. Demand for dollar demoninated Treasuries is causing our dollar to rise to levels that begin to HARM other countries economies and MAKE IT MORE EXPENSIVE to buy goods (INFLATION ) for you global inflation people.
Because oil and commodities are priced in US DOLLARS!
So as our dollar strengthens it takes more and more to buy the same basket of goods.
Especially hard hit are emerging market countries.
CONVERSELY a strong dollar usually makes IMPORTED goods LESS expensive for Americans.
It does hurt USA exporters.
This is NOT without risks to our economy! It is NOT always good to have our dollar too strong.
Why Investors Need to Watch the Rising Dollar | Morgan Stanley
As the U.S. dollar strengthens against other major currencies, investors may be overlooking the potential risks to markets and the economy.
www.morganstanley.com
Why the U.S. dollar is strengthening
Policy by the central bank, interest rate differentials and a risk haven move into U.S. dollar-denominated assets are driving up the dollar against major trading currencies.
