The dollar has been strong against other fiat currencies, but not so strong against real money (gold). From James Rickards at dailyreckoning.com:
The dollar has been extremely strong over the past two years. This persistent dollar strength has been a mystery to many. After all, the dollar’s problems are well known.
The ratio of government debt to GDP for the United States is at a record high approaching 130% (a prudent level is considered 30%, and anything over 90% is a headwind to any economic growth at all).
The U.S. is running multitrillion-dollar deficits year after year. The Congress and White House seem in the grip of Modern Monetary Theory, which claims that the U.S. can run unlimited deficits and accumulate unlimited debt without economic harm because it can print money in unlimited quantities to finance the debt and spending.
Meanwhile, projected annualized interest payments on the U.S. national debt exceeded $1 trillion at the end of October, according to Bloomberg. The cost of debt service has doubled in the past 19 months as interest rates have risen.
This fiscal profligacy comes against a backdrop of social unrest and political dysfunction. We’re facing a presidential election next year in which one candidate, Biden, is senile and the other candidate, Trump, may be behind bars on Election Day.
