No One Believes US Dollar Rhetoric and it's Hurting Your Wallet
US Treasury Secretary Timothy Geithner has been regularly trumpeting his commitment to a strong dollar. The problem is… no one anywhere believes him.
According to the International Monetary Fund, the portion of global currency reserves held in dollars is now at its lowest level in about ten years. The daily barrage of reports from foreign nations dissatisfied with the dollar only adds to its diminished appeal.
Worst of all, the weakening dollar is not just hurting exchange-rate sensitive Americans abroad. Even at home the net worth of the average American has shrunk by almost $40,000 since 2007, and in global rankings of quality of life the US has dropped 7 places – it’s now 13th – from two years ago.
Even The Economist’s famed Big Mac Index shows that since last year Americans are paying the same price for McDonald’s burgers, as compared to Europeans who’ve seen a 13 percent discount in their Big Macs over the same time period.
Bloomberg has an extensive piece today that fleshes out all these details and more. It’s worth taking a look to better understand the dollar’s collapse.