While the alpha economists are not sure if an high US dollar is necessarely bad for America (see bellow) gold bug Atomic after a careful examination of all the relevant theories and facts has been already for some time pronouncing that an "...high US dollar will crap all over the USA" This is understandable as for gold not to fall a bit more in search of its intrinsic value America according to Goldbug economics must be heading no more for hyperinflation Zimbawee style (that is abloslutely already in the past) but for a recession or worse.
For quite long time that I have been expecting goldbugs to invoke the threat of climate chance as a reason to buy gold, but so far they have le3t me down, most likely because they need a more immediate type of threat.
"Tim Duy is having a debate with Scott Sumner, who insists that the strong dollar won’t hurt US growth.
I think we need to think about this both conceptually and quantitatively, and I’m not nearly so sanguine.
Sumner says that you can’t reason from a price change; the dollar doesn’t just move for no reason, so you have to go back to the underlying cause and ask what effect it has. Actually, asset price moves often have no clear cause — they’re bubbles, or driven by changes in long-term expectations, so you really do want to ask about the effects of price changes you can’t explain very well.
More specifically, Sumner is right that if the euro’s fall is being driven by expansionary monetary policy, this affects the U.S. through the demand channel as well as competitiveness, so it may be a wash. But I’ve already argued that the fall in the euro is much bigger than you can explain with monetary policy; it seems to reflect the perception that Europe is going to be depressed for the long term. And if that’s what drives the weak euro/strong dollar, it will hurt US growth."
