Consider the (Currency) Alternatives
Democracy is the worst form of government — except for all the others.
–Winston Churchill
Substitute “U.S. dollar” for “democracy,” and “currency” for “form of government,” and you have a succinct explanation for the major rally in the dollar the last two weeks or so.
Actually, it’s really not true that all other currencies are worse.
What is true is that the currencies that are stronger — for example, Australia’s and Canada’s — simply don’t have the circulation and scale to substitute for the dollar.
Think of it like the stock market: it’s a lot easier to buy or sell 10,000 shares of ExxonMobil than a little, over-the-counter stock.
