Economies have vital signs just like the human body. These indicators are beginning to show our economic body is not so well. Not sick yet, but not robust.
The most visible sign, for now, of our economic health is the value of the currency. I watch it every day and I see that relative to the euro, as an example, the dollar is weakening. Same with the index of currencies. Not very long ago you could trade a dollar for euro. Now, it takes almost a dollar and a half to buy a euro. Some say there is advantage to a weak dollar. It helps our exporters and helps re-balance our trade. Maybe. There is also some deception that goes with a weakening dollar. The positive earnings that Wall Street has been enjoying lately would not be there with a strong or even stable dollar. As an example, information technology companies do most of their business overseas. So, the currency fluctuation distorts the real performance of these companies. The bottom line is the strength of currency reflex’s the confidence other countries and business have in America. If our economy was a human body we might say it had a low grade fever.
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AuthorBill Bays Archives
April 2016
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