https://www.marketwatch.com/investing/index/dxy
We haven’t seen the dollar this strong since the early 2000’s which begs the question, what does this mean for the global economy?
https://www.sciencedirect.com/science/article/pii/S0304405X21002932
The dollar is the most common currency of choice for debt contracts worldwide. According to the Bank for International Settlements.
Global debt has hit a record high of over $300 trillion dollars.
https://www.thebalance.com/how-the-dollar-impacts-commodity-prices-809294
Commodity trades among countries are mostly settled in dollars. Things like agriculture, energy, and metals.
Opinion:
Now that I’ve given you the facts I’d like to share my thoughts.
The global economy will suffer as a result of the dollar becoming stronger. Countries/ Corporations that owe a significant amount of debt will find it harder and harder to pay off that debt with interest rates going up and the dollar becoming stronger. This will lead to Countries/Corporations defaulting on their debt, Sri Lanka was only the first domino to fall.
This gets worse, as countries start to have a hard time accessing liquidity and paying off their debt they’ll also be faced with a shortage of commodities. Their domestic currency will start to devalue vs the dollar making commodities extremely expensive relative to their domestic currency.
I expect the Middle East/Africa to be the most impacted, considering the amount of food they import.
You may think the United States is safe from this global mess, but mind you we import most of our stuff so it’ll be interesting to see how things play out.
Hope for the best and prepare for the worst.
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This is a one-time notice from SCHOOL OF MINNOWS, a free value added service on steem.
Getting started on steem can be super hard on these social platforms 😪 but luckily there is some communities that help support the little guy 😊, you might like school of minnows, we join forces with lots of other small accounts to help each other grow!
Finally a good curation trail that helps its users achieve rapid growth, its fun on a bun! check it out. https://plu.sh/altlan/
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