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The Long-Term Dollar Index

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    March 22, 2015

    The words of wisdom often (mistakenly) attributed to Mark Twain – “History doesn’t repeat itself, but it does rhyme” – come to mind when sizing up the possibilities for another financial crisis sooner-rather-than-later amid all the global hand-wringing about the rapidly rising U.S. dollar, depicted below via this item at Bloomberg.

    Note that, despite the recent reversal, the long-term trend is decidedly down, however, the more important point might be that there’s a curve here at all – prior to the end of the Bretton Woods System in the early-1970s, this curve would have been flat for decades.

    Of course, that point is routinely overlooked in the financial media as everybody has, over the years, seemed to convince themselves that a world full of freely floating fiat currencies is just the way things work and we have to make the best of it.

    Images: via Flickr (licence attribution)

    About The Author

    As you may have already deduced, this is not your typical financial blog, accompanied by some run-of-the-mill investment newsletter, and I’m not your typical financial writer.

    In fact, I spent my entire working career as an engineer before retiring back in 2007 at the tender young age of 46. Two years prior to that in 2005 I started writing a blog – The Mess That Greenspan Made – mostly just to poke fun at the housing bubble and the policy makers who had led us down that path.

    Details about the investment newsletter and information about the performance of the associated “model portfolio” can be found here and if there are any questions that I can help answer, just send mail to tim@iaconoresearch.com.


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