Why’s the Dollar So Darn Strong?

November 08, 2023

by James Rickards Daily Reckoning

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.