There has been some confusion among those interested in the U.S. monetary policy and why the U.S. dollar has remained strong even as the Federal Reserve created enormous amounts of money out of thin air. Under normal conditions that would have put downward pressure on the value of the greenback.
Since economics are no longer operating under normal conditions, neither will the usual performance of the U.S. dollar; and it hasn't.
When the Federal Reserve launched its money-creation spree, it changed the currency and economic dynamic around the world, as other central banks were forced to enter a currency war if their particular economy relied heavily on exports.
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Tuesday, August 4, 2015
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