Rekindling the Dollar Debasement Strategy The U. S. dollar, as measured by the dollar index, has generally gone up since mid-2014. The dollar index goes up when the U. S. dollar gains strength (value) against a basket of currencies, including the euro, yen, pound, and several others. Conversely, the dollar index goes down when the U. S. dollar loses value.
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Between July 30, 2014 and December 28, 2016, the dollar’s value, as measured by the dollar index, increased from 79.78 to 103.30 – or 29 percent. Since then, the dollar index has dropped to about 100. In addition, President Trump has said that the dollar is ‘too strong’ and Treasury Secretary Steven Mnuchin has called the dollar ‘excessively strong.’
President Trump wants a weaker dollar to help with his program of bringing manufacturing jobs back to the U. S. The rationale is simple enough. A weaker dollar should make U. S. exports more attractive on international markets. Similarly, a weaker dollar should make foreign imports more expensive for U. S. consumers so they’ll buy products Made in USA.
This post was published at Acting-Man on January 30, 2017.
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