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by xnx 774 days ago
> The US dollar is indeed "strong", but it still buys less stuff than it did last year.

"...Americans can afford to buy more foreign goods and services (including cheaper vacations).

1 comments

Unless you're in the habit of taking daily holidays that is practically untrue. The US dollar has been dropping in value at a rate of ~5% per annum for the last few years. And have an official policy of dropping ~2% per annum.

So even if it strengthens 10% against the Yen then that just means that someone in Japan will be feeling really poor, but a US dollar still won't be buying as much as a US dollar from a few years ago would have once inflation in both currencies gets factored in. The purchasing power of all the currencies is dropping, it is just the Yen is dropping faster. These are policy choices by the respective governments (although they often don't feel like choices).

I'm sure there are a bunch of currency traders making good money and it is certainly possible that US dollars buy more in some places. But it is more likely that a US dollar in 2024 buys less than in 2023 everywhere, because the US government has an official policy of making it so. Over 5 year timelines it is all but a guarantee that they will succeed in their policy. There isn't a global trend where the US dollar buys more than it did some time in the past; it is strengthening against other currencies, not rising in value.