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If you take the chart in the article at face value, where USD is the base currency and almost every other currency is undervalued in comparison... doesn't that
by ljm 5y ago
If you take the chart in the article at face value, where USD is the base currency and almost every other currency is undervalued in comparison... doesn't that mean that USD is overvalued in those terms? Or that USD derives its value from other currencies depending on it?
If you calculated an equilibrium of sorts then USD would be worth less. And you'd have to separate the currencies that are based on USD as the standard and not gold or some other resource... right?
- pc2g4d 5y agoThe USD is relatively overvalued due to the geopolitical position of the United States, the petrodollar system, etc. By being the "reserve currency" it has built-in additional demand beyond what would be expected. This strengthens the dollar and weakens others by comparison, leading to the persistent trade deficits the U.S. suffers with many other economies, lack of competitiveness of U.S. exports, etc. At least, that's my understanding.