Market Overview

American Buying Power Degraded: Dollar Slammed By Trump Administration

Share:

The U.S. Dollar dropped sharply Thursday after Secretary of the Treasury Steven Mnuchin said the United States wanted a weaker currency. The dollar had already fallen sharply since President Trump took office.

While a weaker dollar inflates asset prices which is likely the reason for the comment, it hurts lower and middle income Americans as buying power degrades and inflation jumps higher. Anyone who is not invested heavily in the stock market is seeing their real buying power drop with oil prices surging and other prices jumping in response.

Investors, on the other hand, are loving it. Those with millions and billions invested in the stock market are noticing that every time the dollar drops, the stock market jumps higher. In fact, it can be argued that there is a bubble in the stock market because of the weaker dollar.

The bottom line is, we should all be careful of this uber weak dollar policy. There will be repercussions in the future for all Americans.

In looking at the stock chart, it clearly shows the exact spot it will fall to. Using the PowerShares DB USD Index Bullish (UUP), the U.S. Dollar will hit major pivot highs from 2012 and 2013 at $23.00. That means there is still some near-term downside because a technical support is tagged.

Lastly, please be aware that just like with Federal Reserve policy on massive money printing and how global central banks followed suit, other governments will start to devalue their currency in response. This ultimately is a long-term positive for gold, silver and Bitcoin.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributorNews Movers & Shakers Politics Forex Events Markets General

 

Related Articles (UDN + USDU)

View Comments and Join the Discussion!

8x8's Earnings Outlook

Earnings Preview: Dime Community Bancshares