There is currently an inverse relationship between the dollar and the stock market. When the dollar rises the market falls. The opposite is true when the dollar falls. There is also talk that a strengthening dollar will also put the U.S. back in recession. While it is true that a rising dollar hurts exports, it is wrong to conclude that a continually falling dollar is good for our country.
Yes, there are pluses from a declining dollar, but the country won’t benefit and you and I won’t be well served over the long term. I am not aware of a single instance where a country’s declining currency led to rising standards of living and sustainable economic growth. On the contrary, capital flows to countries with economic growth and relatively low taxes, and investors and foreign businesses buy that country’s currency, pushing it up and depressing the one they’re selling. Capital goes where it is treated best.
No comments:
Post a Comment