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Effects of strong dollar and its global reserve status: --> Americans can buy stuff / take international vacations more cheaply --> Better lifestyle --> Ameri
by nopinsight 11y ago
Effects of strong dollar and its global reserve status:
--> Americans can buy stuff / take international vacations more cheaply --> Better lifestyle
--> American corporations can use their stocks valued in dollars to takeover foreign companies/assets and expand more cheaply.
--> Power to punish enemies with financial sanctions/manipulations.
--> QE over and over again with near perfect impunity. Ability to rescue itself from certain kinds of financial crises.
- cheriot 11y ago#1 Very nice from the Zanzibar beach I'm sitting on, but I doubt it's a big motivator! #2 Sounds like something significant. Do you know of a way to quantify it? #3 As far as I know, the threat is to shut financial institutions out of the US market. I don't think the US government has much control over a dollar once it's leaves the country. #4 The Chinese have a similar ability to print massive amounts of money without inflation. I wonder if it's a property of sufficiently large economies. The article also mentions a downside that the Fed has had to print money to keep foreign institutions afloat.