The dollar kicked off 2015 by rallying against other major currencies, underscoring heightened expectations for robust U.S. growth in the new year relative to the rest of the world…..or trouble for the economy…….
[Reposted from the blog of Dan DiMicco | Dan DiMicco | Jan 6, 2015]
The article correctly points out the negative impact of the dollar on exports and Tourism but it completely misses the even more negative aspect of increased imports on the economy and job creation. Imports are even more competitive with domestic producers, who are already disadvantaged by trade cheaters! Why could, what appears as a “good” thing, be BAD for our economy and job creation? it all has to do with the levels of or extremes reached by the strengthening Dollar. Extremes ALWAYS beget extremes and in almost ALL cases extremes are bad for Companies, Countrys, Individuals, and Economies! The Dollar is no exception. At these levels we are at extremes!
We must learn to do what the rest of the World already does, managed our Trade to our advantage and bring BALANCE back into our economy. Only through an economy significantly more Balanced between Services and Goods Manufacturing can we create real wealth and strong sustainable growth in well paying jobs and economic growth. This is important to the health of not only the USA but to the entire World economy.
The article presents plenty of thoughts on why a stronger dollar is not always a good thing. Unfortunately, history supports these concerns in spades. Read it and share your thoughts.