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The US dollar is just a type of asset (i.e. of the cash asset class). I'm proposing that it's become less valuable compared to other types of assets such as spe
by jameslk 6y ago
The US dollar is just a type of asset (i.e. of the cash asset class). I'm proposing that it's become less valuable compared to other types of assets such as specific stocks like Apple's, gold, etc. I believe this is due the effects of the Federal Reserve's actions of injecting more US dollars into the economy recently (aka money printing). As more US dollars are created from thin air, other asset classes naturally increase in value, or the US dollar decreases in value, whichever angle you want to look at it from. This is simply called inflation.
Often times the Consumer Price Index is referenced as the source of truth on inflation, especially when the Fed makes its decisions on adding/removing money into the economy[0]. But the CPI doesn't track every type of asset such as stocks or gold, since these aren't things the Fed is trying keep the US dollar stable with as part of its dual mandate[1].
Price fluctuations haven't happened evenly across asset classes just because of the way COVID-19 has had effects on various parts of the economy. Not all stocks have increased due to negative effects of COVID-19 on certain types of businesses, not all real estate has climbed due to people moving around during COVID-19, etc.
0. https://en.wikipedia.org/wiki/Core_inflation https://en.wikipedia.org/wiki/Core_inflation
1. https://www.investopedia.com/articles/investing/100715/breaking-down-federal-reserves-dual-mandate.asp https://www.investopedia.com/articles/investing/100715/break...