Former Fed chair Alan Greenspan published an opinion editorial that says he envisions a monetary “tailwind” for the U.S. dollar next year. Economics Inflation
Former Fed Chair Alan Greenspan Says Decreasing Supply of Greenbacks Makes the US Dollar a 'Better Store of Value’
On Nov. 2, 2022, the American economist and 13th chairman of the U.S. Federal Reserve, Alan Greenspan, published an opinion editorial that says he envisions a monetary “tailwind” for the U.S. dollar next year. Greenspan expects this to happen even if the Fed decides to pivot its restrictive monetary policy to lower rate hikes or absolve them altogether.Alan Greenspan shared his opinion on Wednesday in acalled “Gresham’s Law.
“Even if, as some prognosticators expect, U.S. inflation crests in the first half of 2023, and the Federal Reserve can slow or even stop the pace of rate increases, the U.S. dollar will still have a monetary tailwind to support it,” Greenspan wrote on Wednesday. He also said that fiat currencies have made examples of Gresham’s law a lot more scarce.
“No longer are there [differences] in intrinsic value causing one currency to be favored over another,” Greenspan’s blog post details. “However, foreign exchange rates do reflect some of the forces Gresham originally recognized at work.”The present strength in the U.S. dollar in relation to the other traditional reserve currencies is one example of market participants choosing to hoard what they view as “good money” – or at least better money.
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