Dollar Dollar vs Dollar Dollar

President Trump is in two minds when it comes to America’s values. He wants a strong dollar – one that is worth more than other currencies – because he wants its place as the world’s trade currency for trade and exchange.

On the other hand, he also wants a weak dollar – one that is not worth much in comparison – because it makes American goods cheaper abroad, which could boost homebuilding.

Many things affect the strength of a currency, such as economic growth. But a president can also force the value of the dollar directly. He can drive out the value of foreign currency by sending the file department to buy more of it, for example. He can either force other countries to counter their tariffs or buy more American goods by threatening to impose tariffs on their imports.

Both Trump’s targets, the strong dollar and the weak dollar, are benefiting. But they cannot achieve both at the same time. In this post, I will explain the pitfalls and benefits of each method.

Dollar Weakening

The United States is buying more than it is selling – $78 billion more, as of November. Trump wants to eliminate this trade deficit. The hope is that by getting other countries to buy more American products, they will make American juice and create jobs.

One obstacle is too many dollars. “We have a big, big problem,” he said last summer. “That’s a huge burden on our business.” When the dollar is strong against other currencies, American exports are more expensive for consumers abroad.

Conversely, American shoppers buy more when the dollar is strong. A bottle of Mexican Tequila sold for $30 last year, when the dollar weakened. Since then, the value of the dollar has risen. Now the same bottle costs only $25.

To reverse the flow of goods into the country, Trump has vowed to impose tariffs. The latest plan is to impose a 25 percent tax on Mexican and Canadian imports, and a 10 percent tax on Chinese imports. The goal is to get Americans to buy more household goods. (Trump also said it would stop the flow of immigrants and fentanyl into the country.)

The problem with this strategy is that tariffs can strengthen the dollar. If it is very expensive to buy Mexican bottles, the demand for this product (and everything else from Mexico) falls, weakening the peso against the dollar.

Tariffs will only raise prices in the United States, which could prompt the Federal Reserve to raise interest rates. This means returns for foreign investors, which makes the dollar better.

The threat of Trump creates uncertainty, which pushes people to look for money and safe places (like the United States, which has the largest economy in the world and one of the best things) to keep his money. The result? A stronger dollar.

The dollar is strengthening

The Dollar’s status as the world’s largest reserve currency is extremely valuable. It is companies, banks and people who often use prices and accounts to organize, wherever they are. Every country uses it for trade and exchange. Which pushes the value, which makes American exports more expensive.

Such a status, however, also confers honor and privilege. The US government, for example, borrows money from the sale of corporate bonds. Because there is so much demand for dollars, the United States does not need to pay much. Which reduces the cost of borrowing – helping a government that is $36 trillion in debt.

Being the largest film archive in the world also gives it a unique strength. Only US banks can handle dollar transactions. Which gives Wasomenton Leplerage. After the invasion of Ukraine, he stopped Russia from investing in business. This is why Russia’s relations with other countries are very expensive and excessive.

Washington has extra leverage because other governments and central banks hold dollars in their vaults, so they can trade. This is why the United States was able to release dollars from the Central Bank of Russia.

Trump is clear about the special status of the dollar. When a few countries – Brazil, Russia, India, China and South Africa – returned the possibility of appearing in a new reserve currency, Trump quickly removed the warning for those who might oppose the “strong American dollar.”

The bottom

For now, at least, the dollar’s position is secure. The strength of the US economy and its cheapness and the buying – and selling – of US bonds are inevitable.

Trump can still take steps to weaken the dollar. The problem is that most economists think his proposals – such as stagnant tariffs – will backfire.

Living life: Carol Downner was a leader in the women’s health movement who opened clinics, worked to educate women about their health and promoted abortion techniques that she felt were safe for laypeople. He died at 91.

exercise

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Football Football: Jim State of Ohio emphasized Jim, the Jim, took advantage of the defensive opportunist, the bucks helped the national champion.

Art and ideas

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