Strong Dollar's Return

Archive Report

Global Currency Misalignment

Benefits and Drawbacks; Foreign Protests

As any recent traveler abroad can testify, the dollar is strong again. It buys about twice what it did only three years ago in France and Italy, for example. The dollar even buys more in West Germany and Japan, the industrial giants whose currencies once rivaled the dollar's purchasing power in international markets.

But when Americans come home, they find that the dollar's strength is a mixed blessing at best. True, it makes imports a bargain, and their lower prices help keep U.S. inflation at bay. But the strong dollar, once considered a sign of a healthy economy, has also set in motion a vicious cycle of negative effects. It not only runs up the U.S. import bill but ...

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