May 2, 2011


The USD has been steadily dropping in value against several international currencies such as the Euro, Australian dollar, Singaporean dollar, Japanese Yen, Indian Rupee etc.
There is a huge worrisome talk going on this issue. They say that the dollar must stop declining in value because the US is already into huge debt and fiscal pothole. Generally we believe the concerns are lesser from the US government, markets or corporations than from the out siders lot of those.
The emerging countries are blaming US to in a sense export inflation by telling that money is borrowed in USD to play in emerging mkt and commodities thus also giving boost to their currencies and subsequent loss to their exporters due to rise and strength in their currency exchange rates.
While, the USA has completely avoided to come in open and talk on such allegations; Fed chairman Ben Bernanke has at times spoke about their likelihood of stronger dollar than a weaker one. However their action does not suggest to match it. The Fed has been maintaining its policy rates to near zero since 2008.
A weak dollar helps USA exports.
Many insider and rebellious voices like us are also saying that the US is manipulating the dollar to her benefit. Such as after 2008 crisis the dollar began to rose and remained stronger, so that the US can buy/import commodities of the world at cheap rates; and now it want to target higher exports by way of weak dollar and earn more foreign exchange. It is noticeable that the US govt has set a goal of doubling its exports by 2015.
Posted on Monday, May 02, 2011 | Categories: