Dollar Strength Temporary: Is it a Result of Record Debt?


Amazing what a week will do—apparently, the dollar is much more valuable today. But in reality, this temporary dollar strength can not be predicated on the U.S. advancing in the accumulation of the largest debt in the history of the world. To those with common sense, an unsustainable debt is obviosuly a problem—but for some, an ever-expanding debt isn’t a problem—it’s a reason to celebrate.

The reason it is not a problem, from the perspective of a select few, is that without an ever increasing debt, we have monetary deflation, which is the nemesis of those who run and benefit from our currency creation system, causing institutional insolvency and bank failures. Stop-gap measures such as suspension of mark-to-market accounting and GAAP standards helps in the short run. But debt expansion and a larger supply of currency is the solution.

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