The Dollar: where is it heading?

I have often stated that the US dollar’s strength is in the fact that one can spend it any where in the world, one can save the dollar in most banks in the world, and one can use the dollar as an accepted currency when making an investment in any county in the world. As a result most countries, institutions, and investors keep the dollar as their medium of exchange for foreign transactions. In fact, the US dollar is the only accepted currency in commodity transactions.

The dollar is the currency of choice for international transactions; the dollar is the global currency.

The last few years I have been hearing naysayers say the dollar is going in a free fall because the Federal Reserve is producing way too many dollars. The world is awash in the dollar and countries, institutions and investors are simply storing the dollars they have because they don’t know what else to do with it.

Ed Yardeni thinks these excess dollars will be spent and, because of this, the world’s commerce will be shortly entering a golden age. In other words, once one realizes that the dollar is here to stay, they will start spending their excess dollars on productive enterprises.

I tend to agree with Ed because I do not see how the world’s commerce is going to get out from under the dollar.