The persistent strength of the US dollar is a source of puzzlement to many contrarian investors. This puzzlement is understandable as the United States is effectively a bankrupt nation in many ways, which can't even produce enough to support what it consumes, but instead relies on a massive trade deficit to bring in the goods that it needs. Ongoing current government deficits are currently running at the extraordinary level of about 10% of the national economy, and the situation will only be getting worse with tens of trillions of dollars of looming entitlement shortfalls. Making matters worse, the Federal Reserve has resorted to creating trillions of dollars out of thin air, in a blatant monetization of the kind which historically almost always ends badly.
All of the above notwithstanding â€“ the dollar remains the world's reserve currency. The dollar thrived even in the midst of the adverse economic effects and the initial rounds of monetary creation in the financial crisis of 2008, and it wasn't even particularly damaged during the budget debacle in the summer of 2011 that could have potentially led to the US defaulting on its debts. Despite all of this the US dollar remains strong â€“ because there is no substitute.
So every thing will get cheep and no one will have a job.
Europe should have put the Euro on the Gold standard!