Certain economists and members of congress keep saying that we need to raise interest rates (and potentially snuff out the growth of the economy) because inflation is right around the corner. They’ve said that for six years, and it must be a long block, because there’s still no inflation.
Why? Because the Euro, which used to be worth $1.30 to $1.60, has dropped down to about $1.05. And almost all other currencies have fallen in relation to the dollar. This makes it harder for us to export, but it sure makes all our imports cheaper. Cheaper prices by definition means less, if any, inflation.
Why have the currencies fallen? Because the US has one of the only economies in the world that’s booming, and people with money want to put their money to work in the US, and they want to buy into US companies. This also bodes well for the US stock market, as far as we can see into the future anyway. Where else can they put their money?
Saul
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