Jason Mark

Today's Lesson: Why the Fed Raised Its Rates in 1931

If the dollar is to rise in value a combination of two things must happen. Other countries begin investing more heavily in the U.S. supporting economic growth while the price of money goes up in effect making it more expensive to borrow. I know lowering interest rates makes borrowing money more attractive, but it doesn't change WHO should be borrowing. There hasn't been enough time between Greenspan's cuts and the current cuts for the dollar to have had time to recover. We've gone from one bubble to the next. Remember also that higher interest rates make money more expensive which adds value and higher interest rates provide greater returns on interest baring accounts which makes those accounts more valuable. Lower interest rates to the opposite on both counts.