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It’s the currency, stupid

Weekly investor research

27 March 2017

It is wrong to blame the poor performance of the US economy on unfair trade practices abroad. The real culprit is the Dollar, which has become misaligned over the last few years due to massive capital inflows, low US productivity and US inflation has picked up significantly. The US benefited tremendously from the strong Dollar policy in the immediate aftermath of the crisis in 2008/2009, but today the US economy would do better with a weaker Dollar. This is because the US problem is no longer availability of finance, but growth in the real economy, particularly exports.

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