Recovering (US) dollar

[Francesca R]

Sometimes we need an autopsy to be sure.

Too late, it climbed off the table and bolted out the door . . .

 

[Francesca R]

This is the funkiest chart though. Eight years of "carry trade" rubbed out in about 3 months. (I love currencies)

 

[Tippit]

It's all relative no? If you want to look good, stand next to the truly ugly. I would not be surprised to see the dollar gain a fair bit more against those currencies it was "going to hell in a handcart" against until recently. The good thing about currencies is that they cannot all go down at once

They can't? I was under the impression that people exchanged currencies for more than just other currencies. If all currencies are debased simultaneously at the same rate and all else being equal, then you will see a corresponding rise in the general global price level and all currencies will have effectively "gone down".

The appreciation of the USD is mostly a function of monetary destruction on a massive scale that is even outpacing a rapidly contracting economy - this in spite of the "stimulus" provided by the Fed.

There are two essential ways for a currency to appreciate - a reduction of the supply such as what happens with credit destruction on a large scale, and economic growth. Guess what the current reason is.

 

[Francesca R]

They can't? I was under the impression that people exchanged currencies for more than just other currencies. If all currencies are debased simultaneously at the same rate and all else being equal, then you will see a corresponding rise in the general global price level and all currencies will have effectively "gone down".

That is correct, but I was referring to exchange rates of one currency to another and not relative to any consumption item or asset.

The appreciation of the USD is mostly a function of monetary destruction on a massive scale that is even outpacing a rapidly contracting economy - this in spite of the "stimulus" provided by the Fed.

Like a similar example in another thread, the beauty of floating exchange rates is that you get to believe that currency movement is the result of US government's "legalised thieving", or all manner of other reasons if you like. As you illustrate, domestic currency strength lends itself to explanation by malign coercive Federal expropriation of citizens' wealth just as much as weakness might. You really can have a ball in this regard.