Stuff doesn’t matter until it does. The dollar is classic example, standing like an elephant in the room that nobody wanted to see or deal with until yesterday, when a key China official said that China should shift to stronger currencies than the dollar.
Suddenly the falling dollar, which has spun by the Goldilocks crowd to be a positive event because of its impact on exports, is seen for what it is: A sign of weakness by the U.S. As Morgan Stanley’s Stephen Roach wrote in the New York Times two months ago, “No nation has ever devalued itself into prosperity.”
The dollar is now the economic equivalent of the Blue Light Special, and we all know what happened to K-mart. I sit here not as an economist or a student of the economy, but as an American reporter of business matters and the stock market who tries to simplify things — and from my vantage point the falling dollar has done little more than make the U.S. the discount mall to the world.
I’m at a loss to understand why that should be a good thing, especially as other countries decide they’d rather invest in Tiffany (NYSE:TIF) than Target (NYSE:TGT).
With that, I’d like to get the discussion going. Anyone?