[Marxism] Dollar's continued strength defies forecasts

Marv Gandall marvgand2 at gmail.com
Sat Feb 8 06:29:35 MST 2014

>> On Feb 7, 2014, at 1:45 PM, T <thomasfbarton at earthlink.net> wrote:
> Foo.
> Typical journalistic nonsense.
> See chart of dollar at:
> http://quotes.ino.com/chart/index.html?s=NYBOT_dx&t=&a=&w=&v=dmax
> Since Summer of 2013, the international exchange value of the dollar has declined sharply.

Your chart shows the dollar has actually traded in a narrow range since last summer. You could have better illustrated your point with reference to the long decline of the dollar since the move to floating exchange rates in the early 70's. Since it peaked in the mid-80's, the USD has lost half it's exchange value relative to a basket of major currencies. See:


But I wouldn't make too much of this. The relative FX decline of the dollar against the euro, yen, and other currencies hasn't affected its status as the reserve currency of choice against them over the entire period. Commodities continue to be priced in dollars, and it is at the other side of most paired currency trades. So long as the US remains the world's largest and perceptibly most stable market, with the world's most powerful military, investors and exporters will continue to accumulate dollars pumped out by the Fed, and other central banks will conduct open market operations to maintain a loose peg so that their producers are able to gain access to the deep American domestic market.

The renminbi is likely to challenge and perhaps supplant the dollar if and when China's economy   overtakes the US. But, barring a catastrophic collapse of American capitalism, this will be a gradual process as the PRC moves gradually to full convertibility of its currency.

The Financial Times article I  posted yesterday is not in contradiction to any of the above and acknowledged the likely ascent of the renminbi. So I don't understand why you dismissed it as "typical journalistic nonsense". Perhaps you could explain further.

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