Historically, the dollar is cheap. The first "spike" in the graph above was caused by the simultanous tightening of monetary policy (dollars were scarce) under Volcker and the expansionary fiscal policy under Reagan. The second "spike" is the financial or "internet" bubble of 2000, when foreigners wanted dollars to invest in our equity markets.
Wednesday, May 28, 2008
The dollar in historical perspective
Historically, the dollar is cheap. The first "spike" in the graph above was caused by the simultanous tightening of monetary policy (dollars were scarce) under Volcker and the expansionary fiscal policy under Reagan. The second "spike" is the financial or "internet" bubble of 2000, when foreigners wanted dollars to invest in our equity markets.
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