Dollar Drowning! Is This the End of American Economic Dominance?

Gotham's Economy: Stable Unlike the Dollar

The world's economy is going haywire it seems. The Bat Signal isn't flashing for bank robberies anymore; it's flashing for *currency collapses*. The dollar that once mighty greenback is doing a freefall impression down over 9% this year. Bank of America says 61% of fund managers expect it to keep falling. Robin get the Batarangs ready; we might need to physically prop up the stock exchange. I operate outside the law but even I know economic stability is key to preventing chaos. Although a little chaos is Gotham's M.O. isn't it? Maybe I should invest in Swiss Francs? Even I would be a fool to trust the chaos that is going on in Gotham. Everyone has a plan until they get punched in the mouth.

Safe Havens and Currency Chaos: A Joker's Game

While the dollar is taking a beating currencies like the Yen Franc and Euro are flexing their muscles. Up 10% 11% and 11% respectively! It's like watching a financial superhero showdown – except it's less 'POW!' and more 'quantitative easing'. Currencies like the Peso Loonie Zloty and Ruble are also strengthening against the dollar. A little too strong if you ask me! Even the Joker would have trouble predicting this level of madness. And some emerging markets are really struggling like the Dong Rupiah and Lira. What doesn't kill you makes you...stronger? I highly doubt it.

Breathing Room or Noose? Central Banks Weigh Their Options

According to ForexLive Chief Currency Analyst Adam Button most central banks would be happy to see a 10 20% decline in the dollar. Button seems to think this means that countries can chill out with interest rates like I chill out on gargoyles. But these emerging markets can’t exactly cut rates whenever they feel like it. Like emerging villains in Gotham. It complicates the export competitiveness of US trade. And they have to watch out for capital flight so they don't have to make a hasty exit from the Gotham PD!

Devaluation Dangers: A Risky Game of Chicken

Devaluation is a tempting strategy but it's like playing chicken with the U.S. administration. No country wants a trade war on top of everything else. Emerging economies are hesitant to lower interest rates due to debt risks. Capital outflows are a real fear. If I know one thing it's that fear is a tool. But fear of economic ruin is a powerful motivator even more powerful than what I can do.

The ECB and SNB: Masters of Their Own Fate?

The European Central Bank has already cut rates saying inflation will hit their 2% target. Talk about optimism. And the Swiss National Bank has been battling a strong Franc for years. If capital keeps flowing in they might have to do something drastic to devalue. It's like when I have to resort to extreme measures to stop the Joker but at least he's an agent of chaos I can understand. I understand some of the trade tensions! These economic negotiations are a headache.

Avoiding the Currency War: For Now...

Devaluing currency risks causing prices to rise. Most central banks have the means to devalue but it's not very likely at this time. They would have to consider foreign debt trade balance imported inflation and FX reserves. So avoiding a currency war is the preferred option. For now. The world of economics is more complex than any of the puzzles that Riddler can throw at me. But in times of uncertainty you always need to watch out for the things you do not know. So remember stay vigilant!