Headline, October 19 2022/ ''' '' STRONG DOLLAR STRUMS '' '''

''' '' STRONG DOLLAR

 STRUMS '' '''

''NEVER JUST LIVE''. HOW THE WORLD FARES in the years ahead, will by and large depend on !WOW! - the Leadership, initiative and support so provided by the students of this great nation called :  The United States of America.

The World Students Society - for every subject in the world, is the exclusive ownership of every student of America just as it is the exclusive ownership of every student in the world. '' WELCOME ALL TO !WOW! ''

One Monday last the British pound touched a record low against the dollar and investors balked at a government tax cut and spending plan. And China, which tightly controls its currency, fixed the renminbi at its lowest level in two years while taking steps to manage its decline.

THE DOLLAR IS THE WORLD'S RESERVE CURRENCY - the one that multinational corporations and financial institutions, no matter where they are, most often use to price goods and settle accounts.

ENERGY AND FOOD tend to be priced in dollars when bought and sold on the world market. So is a lot of debt owed by developing nations. Roughly 40 percent of the world's transactions are done in dollars, whether the US is involved or not, according to the study done by the International Monetary Fund.

STRONG DOLLAR WEIGHS HEAVILY ABROAD. IN NIGERIA AND SOMALIA where the risk of starvation already lurks, the strong dollar is pushing up the prices of imported food, fuel and medicine.

The strong dollar is nudging debt-ridden Argentina, Pakistan, Egypt, and Kenya closer to default and threatening to discourage foreign investment in emerging markets like India and South Korea.

''For the rest of the world, it's a no-win situation,'' said Eswar Prasad, an economics professor at Cornell University in New York State and the author of several books on currencies. At the same time, he said, the US has no choice but to act aggressively to control inflation domestically : '' Any delay in action could make things potentially even worse. ''

Policy decisions made in Washington frequently reverberate widely. The United States is a superpower with the world's largest economy and hefty reserves of oil and natural gas. In global finance and trade, though, its influence is outsize.

And now, the value of the dollar compared with the other major currencies like the Japanese yen has reached a decades-long high. The euro used by 19 nations across Europe reached 1-to-1 parity with the dollar in June for the first time since 2002.

The dollar is clobbering other currencies as well, including the Brazilian real, and the South Korean won and the Tunisian dinar and the Pakistani rupee.

One reason is the string of crises that have rocked the globe, including the coronavirus pandemic, supply chain chokeholds, Russia's invasion of Ukraine and the climate disasters that have imperiled the world's food and energy supplies.

In an anxious world, the dollar has traditionally been a symbol of stability and security. The worse get, the more people buy dollars. On top of that the economic outlook in the United States, however cloudy, is still better than the outlook in most other regions.

Rising interest rates make the dollar all the more alluring to investors by ensuring better returns. That, in turn, means they are investing less in emerging markets, which puts further strains on these economies.

The unusual series of events, which has led to weakened global demand, is making things even worse for countries that might otherwise be able to take advantage of devalued currency to export more of their own goods, which have become cheaper.

A fragile currency can sometimes work as ''a buffering mechanism,'' causing nations to import less and export more, Mr. Prasad said. But today, many ''are not seeing the benefits of stronger growth.''

Still, they must pay more for essential imports like oil, wheat or pharmaceuticals, as well as for loan bills due from billion-dollar debts.

Consider that a year ago, $100 worth of oil or $100 debt payment cost 1,572 Egyptian pounds, 117, 655 Korean won, or 41, 244 Nigerian naira.

Assume there had been no price increases or inflation. Today - purely because of the strengthening dollar - that same $100 payment costs 1,950 Egyptian pounds; 143, 158 won and 43, 650 naira.

Campaign against inflation pumps up U.S. currency, and raises prices elsewhere, say, the entire world over.

The Honour and Serving of the Latest GlobalOperational Research on the State of the World, and the State-of-Currencies, with values, continues. The World Students Society thanks author Patricia Cohen.

With most respectful dedication to the Leaders of America, and then Leaders of the world, Students, Professors and Teachers. See Ya all prepare and register for Great Global Elections on The World Students Society - the exclusive ownership of  every student in the world : wssciw.blogspot.com and ........ Twitter - !E-WOW! - The Ecosystem 2011 :

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