Spiegel Online: Trump’s Dangerous Game With the US Dollar

Economists around the globe suggest the United States is engaging in a currency war. “Even though the U.S. economy has already been growing robustly for years and, with an unemployment rate of just 4.1 percent, is approaching full employment, Trump is continuing to stimulate growth – a focus that could result in an overheated economy, which would present a danger to the entire global economy,” explain Tim Bartz and Martin Hesse for Spiegel Online. “The combination of a weak dollar and protectionist measures are aimed at creating a competitive advantage for American companies versus their competitors from around the world.” A weak dollar reduces the value of the US debt, which now totals $20 trillion. The US dollar has lost 10 percent of its value since June of 2017 and 25 percent of its value since 2014. When the US dollar is strong, US exporters do well but overseas companies that export goods see their profits fall, and such trends threaten Europe’s fragile recovery. Some economists suggest that currency manipulation could lead to the dollar losing its status as the world’s preferred reserve currency. The US Federal Reserve will assess interest rates in March, and a gradual rise may calm worries about inflation and an overheated economy. – YaleGlobal