03.03.2015 - As currency war erupts, buy American
The U.S. economy is facing a predicament the Federal Reserve didn't anticipate — a stronger than expected U.S. dollar. While a strong dollar is great in theory because it reduces the cost of foreign goods for American consumers (including commodities like oil), the stronger currency will have negative consequences for corporate earnings and the markets. This month, Europe will take a page out of Fed Chair Janet Yellen's and her predecessor Ben Bernanke's playbook and begin its own round of aggressive bond buying, known as Quantitative Easing. QE is designed to help stimulate growth. By effectively pumping more euros into the monetary system, QE should cause the value of the euro to continue falling vs. the U.S. dollar. The expectation is that a declining euro makes European goods cheaper and more competitive — but, at what price to the USA?..............................................Full Article: Source
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