Cheers for the Not-So-Mighty Dollar
For all our fiscal woes, the greenback should remain the world’s dominant currency for another decade—mostly because the alternatives are worse. Here’s what that means to us, writes MoneyShow’s Jim Jubak, also of Jubak’s Picks.
Let’s hear it for the euro. With Greece giving enough votes to the conservative New Democracy party that the country is likely to keep the euro (for now, anyway), the common European currency has survived for another day.
But in spite of the euro’s rally after the Greek vote, if I had to pick the best global currency for the next ten years, my choice would be the US dollar.
It’s not because US political and financial leaders are smarter, more virtuous, or more disciplined than their counterparts elsewhere in the world. (It may come as a shock, but they’re not.)
It’s because the kind of self-interested, shortsighted muddling through that these leaders are likely to produce should keep the dollar ahead of the pack for another decade—if only because US self-interest is reasonably well aligned with the interests of the global economy.
Before you go all ballistic on me—How can you pick the dollar? Don’t you know how fouled up the US government budget is and how overextended the Federal Reserve is?—parse my statement in detail.
First, I’m not saying the US dollar will be the best currency in the world over the next decade, only that it will be the best global currency.