Two campers are walking through the forest when they suddenly encounter a grizzly bear. The bear rears up on his hind legs and lets out a terrifying roar.
Both campers are frozen in their tracks.
The first camper whispers, “I’m sure glad I wore my running shoes today.”
“It doesn’t matter what kind of shoes you’re wearing, you’re not gonna outrun that bear,” replies the second.
“I don’t have to outrun the bear, I just have to outrun YOU,” he answers.
The dollar is getting stronger compared to other world currencies, according to the Wall Street Journal. It was not so very long ago that the chattering classes were prophesying the end of the dollar’s role as the global reserve currency. In the FT, an economist worried, “The US will unavoidably account for a declining fraction of global gross domestic product, limiting its ability to supply safe and liquid assets on the scale required.” The WSJ published a piece entitled “Why the Dollar’s Reign Is Near an End.”
But those eulogizing America’s currency spoke too soon. Caught up in their narrative of decline, our lose-lipped commentariat made the mistake of speaking with certainty about something as unpredictable as global financial markets. As the global economic crisis recedes everywhere except snake bitten Europe, the battered greenback is looking relatively good.
We may be slow and decrepit with a debauched currency but we don’t have to outrun the bear. We only need outrun the weaker, slower and even more debauched Euro, Yen, etc.