Will that make it easier for countries like Germany to come back when this is over? We’ll see. Will the U.S. be leading the way back? We’ll also see. It’s certainly not showing itself to be the global leader in this crisis. At least not so far.
Who is? The Media has been pumping up South Korea, but they were kind of a one-off in their ability to respond.
But, back to the dollar.
Fiat money is an odd duck we are still learning about. It appears that the former precious metal backing of currencies has been replaced by the productive capability of the issuing nation (in part), but also (in part) by the *relative* trust assigned to that currency as demonstrated by the FOREX market and the market for that nation’s debt.
So, maybe a better way to put it would be……..if you’re not going to invest in dollars, what nation’s currency would you prefer?
Could the Coronavirus crisis flip this convention of the world economy on its head? We’ve heard lots of chatter about China emerging from this with stronger global influence.
If China can get out of this with a stable government and without international sanctions, they’’ll be lucky.
So is it the Euro’s time to rise?
Questioning the dollar ultimately leads to the question above, “What currency would you prefer?”
The dollar’s strength based on fundamentals may be waning, but so is everyone else’s.