The U.S. dollar surged in value by 11% in 2014, appreciating against all main currencies in the world in 2014 including gold. The infographic below attempts to answer the obvious question, “What is behind this surge in value for the dollar?”
By GainesvilleCoins.com with introductory remarks from a reposting** on VisualCapitalist.com. The original title* of the infographic was The Dollar’s 2014 Power Surge.
In our opinion, it is a very easy explanation: as investors abandon all other options, they continue to look for safe havens. With central banks such as the Swiss National Bank and the Bank of Canada making surprising interest rate or pegging decisions, everyone is looking for safety and predictability. The ECB and Bank of Japan are piling onto the problem by fighting deflation with massive quantitative easing programs…
The question now is: “How long can the USD remain the safe haven of choice?” With moderate economic growth still happening, investors still seem to have confidence in the United States. However, if that at all falters and economic growth slows, there will be nowhere to hide. Remember, it only takes one event to cause a ripple effect and the U.S. dollar bull run could be over. To quote Mr. Warren Buffett: “Only when the tide goes out do you discover who’s been swimming naked.”
[The above article is presented by Lorimer Wilson, editor of www.munKNEE.com and www.FinancialArticleSummariesToday.com and the FREE Market Intelligence Report newsletter (sample here – register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Sources: *http://www.gainesvillecoins.com/infographics/dollar (© 2015 Gainesville Coins, LLC. ) and **http://www.visualcapitalist.com/breaking-us-dollars-recent-bull-run/ (Copyright © 2014 Visual Capitalist | All rights reserved.)
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1. Why the USD Is So Strong & the Implications For the Economy & Stock Market Given the recent upside breakout in the U.S. dollar I’ve been getting a lot of questions about the reasons behind the strength as well as implications for the stock market. Here are my views on the situation. Read More »