U.S. Dollar Now Second Lowest Valued Major Freely Traded Currency
For long, the U.S. dollar was the second highest valued currency among the 7 most traded among the freely traded currencies, after only the British pound. However, since its creation in 1999, the euro has most of the time also had a higher value, usually a lot higher value, though the dollar had a higher value briefly during the 2000-2002 period.
Since then, the currency debasement policy pursued by Greenspan and Bernanke has caused it to have a lower value than more and more currency. The Canadian dollar in 2007-08 and the Swiss franc in 2008 briefly had a higher value than the U.S. dollar but both again became lower valued after the great U.S. dollar rally of late 2008 and early 2009.
Now however both the Canadian dollar and the Swiss franc has regained a higher value than the U.S. dollar. Furthermore, the Australian dollar has also gained a higher value than the U.S. dollar.
As a result there are now 5 major currencies with a higher value than the U.S. dollar, namely the British pound, the euro, the Swiss franc, the Canadian dollar and the Australian dollar. Only the yen has a lower value, and given the fact that its value is still more than 80 times lower, it will be a very long time, if ever, before its value surpasses that of the U.S. dollar. However, the yen has actually increased its value more than the others (except for the franc which has increased similarly), with its value being more than 4 times higher relative to the U.S. dollar compared to the early 1970s, about 3 times higher compared to the mid 1980s.
By contrast, the one currency that has always had a higher value than the U.S. dollar, the British pound, has actually lost value against the U.S. dollar compared to the early 1970s and 1980s and it is the only najor currency to have a lower value against the U.S. dollar compared to early 2000. That is because Mervyn King and his predecessors at the Bank of England has been just as, or even more, inflationist than Greenspan and Bernanke.
Since then, the currency debasement policy pursued by Greenspan and Bernanke has caused it to have a lower value than more and more currency. The Canadian dollar in 2007-08 and the Swiss franc in 2008 briefly had a higher value than the U.S. dollar but both again became lower valued after the great U.S. dollar rally of late 2008 and early 2009.
Now however both the Canadian dollar and the Swiss franc has regained a higher value than the U.S. dollar. Furthermore, the Australian dollar has also gained a higher value than the U.S. dollar.
As a result there are now 5 major currencies with a higher value than the U.S. dollar, namely the British pound, the euro, the Swiss franc, the Canadian dollar and the Australian dollar. Only the yen has a lower value, and given the fact that its value is still more than 80 times lower, it will be a very long time, if ever, before its value surpasses that of the U.S. dollar. However, the yen has actually increased its value more than the others (except for the franc which has increased similarly), with its value being more than 4 times higher relative to the U.S. dollar compared to the early 1970s, about 3 times higher compared to the mid 1980s.
By contrast, the one currency that has always had a higher value than the U.S. dollar, the British pound, has actually lost value against the U.S. dollar compared to the early 1970s and 1980s and it is the only najor currency to have a lower value against the U.S. dollar compared to early 2000. That is because Mervyn King and his predecessors at the Bank of England has been just as, or even more, inflationist than Greenspan and Bernanke.
posted by stefankarlsson at 3:36 PM
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