Has the Dollar Jumped the Shark?

Dave Hoffman

Dave Hoffman is the Murray Shusterman Professor of Transactional and Business Law at Temple Law School. He specializes in law and psychology, contracts, and quantitative analysis of civil procedure. He currently teaches contracts, civil procedure, corporations, and law and economics.

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3 Responses

  1. Street Cred Ed says:

    US doesn’t print $500 bills. Can’t do drug deals in small bills. EU is printing big denominations to appeal to international drug traders. Can do major deals with big denominations.

  2. merevaudevillian says:

    Street Cred is right. The E500 notes are (now) equivalent to about $750, which is much more convenient for drug deals, rather than using 7 or 8 times as much US cash.

    Additionally, Euros are known for their excellent use in snorting cocaine.

    That said, the other substantive points stand true.

  3. Nate Oman says:

    I am not so sure. It is a mistake to think that a strong dollar is ipso facto evidence of a strong economy or that a falling dollar is necessarily a harbringer of a falling economy, e.g. a weaker dollar will help U.S. exporters while blunting the U.S. appetite for imports which will strengthen our balance of payments, etc. etc.

    When Churchill served as chancellor of the exchequer between the wars, he insisted on putting the pound back onto the gold standard because he associated a strong pound backed by gold with the economic dominance of the empire. The decision was an economic mess; the complexity of currency markets, interest rates, and the demand for credit making short work of Churchill’s monetary sentimentality.