Weak US Dollar Good for Euro

One man's loss is another man's gain: this time, the guy gaining is holding Euros, not US Dollars.

Just about everyone is down on the U.S. dollar. It has fewer friends than an airline passenger who admits to having swine flu during a flight. Billionaire investor George Soros says it’s creating “dangerous imbalances.” Dominique Strauss-Kahn, the managing director of the International Monetary Fund, talks of a new global currency dominating the world in a decade’s time.

The reasons aren’t difficult to figure out. The U.S. economy is in bad shape, the Federal Reserve is printing money like crazy, and the budget deficit is out of control. It is hard to believe that in five years’ time, the dollar will enjoy the same pre-eminent role it has had in the global capital markets since the end of World War II. In Europe, the dollar’s depreciation is often presented as a threat. But that is upside-down: Ending the dollar’s reign will boost the European economy.

SOURCE: Dollar Woes Are Good News for Europe’s Markets: Matthew Lynn - Bloomberg.com