The U.S. Dollar

A clarion is a medieval trumpet that had clear, shrill tones. Trumpets were often used to get people's attention when making announcements. We are also using “clarion” in the context of making announcements, as well as being thought-provoking when sharing our information and opinions with those people who are interested in new investment ideas.

TOPIC: THE U.S. DOLLAR

The FOMC, the Federal Open Market Committee, did the predictable today (August 5th) and maintained U.S. interest rates at 2%. The Fed would dearly love to raise rates but does not have the wiggle room to do it. With an economic slow-down now occurring, and possibly lasting for a few quarters, the fear is, or maybe that should be was, inflation. High fuel prices, and plunging house prices have had a dramatic effect on consumer attitudes and spending habits. Inflation no longer seems to be the bogey-man.

Although the U.S. was not able to raise interest rates, which it would like to do so that its beleaguered dollar could recover, events around the world may result in the same effect. Australia recently maintained rates. However, as economic growth Down Under slows, it may be forced to lower rates to get its economy moving. That would make the U.S. dollar more attractive.

The decline in consumer spending in the world’s largest consuming market translates into lesser imports. That means an economic slow-down in