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Opinion

The Case for a Stronger Dollar

A return to stagflation may happen. But even if the U.S. economy does fall into recession, it will not be as severe as what transpires in Europe and Asia. As a result, the global demand for U.S. dollars will continue to grow.
The Case for a Stronger Dollar
A Chinese bank employee counts 100-yuan notes and US dollar bills at a bank counter in Nantong in China's eastern Jiangsu province on August 6, 2019. STR/AFP/Getty Images
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If certain trends continue, the U.S. dollar may soon become much stronger and in much greater demand than it is today.

Relative Strength and Security Matter Most

Federal Reserve policies are among the biggest influence on the value of the dollar, and further cuts in interest rates, as well as fiscal policy, will cause some volatility or a even a falling dollar price, at least in the short term.

But there are other factors with a dominant counter-effect.

James Gorrie
James Gorrie
Author
James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.
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