The Dollar Gains Strength

by DM

When the current American president took office, the dollar was still extremely strong.

I lived in London and New York City when George W Bush took office, and the conversion of dollar to pound was luxuriously in my favor. My wife and I were earning American salaries, paid in dollars, which gave us an edge over our London counterparts.

Bush's destruction of the American economy (his dogged furtherance of the failed supply-side theory) forced the dollar down, down, down on the international market. This has made foreign travel a real difficulty for Americans, and created a wonderful situation for Europeans, especially Brits, to visit and shop in New York.

With Bush leaving office and the American economy ruined by a generation of supply side theories, the dollar (USD) has regained some strength. Today's institutional rate is as low as $1.26 against the pound (GBP), and it is trading at $1.46, the lowest it's been in six years!

I don't actually know what this means, or if it means anything, as an indicator of the American economy; but it certainly makes me feel better about our economy and the prospects for the future.

Also, rumor has it that the Fed might lower the mortgage rate to 4.5%, which is the lowest in my lifetime, and possibly since my parents were born during the Great Depression. I have not been able to find a chart of rates over the years, so if you know of one, please post the link as a comment below.

As I've said, I don't know how the USD gaining on the GBP actually affects our position and our prospects; but it feels good to me!

British Pound to U.S. Dollar Exchange Rate 2003 - 2008

U.S./U.K Foreign Exchange Rate since 1971