The dollar is falling. Or not. Or maybe it is….

When the “experts” don’t know, they crank up the volume

By Morf Morford

Tacoma Daily Index

The US dollar is:

A. Falling

B. Rising

C. Staying about the same

D. None of the above

E. Who the heck knows?

As I read articles, books and innumerable studies and forecasts about the economy, only one thing is certain – no one, no experts, no government panels, no blue-ribbon, Ivy League research groups have even the slightest idea where the dollar is going.

As one recent article put it, “the US dollar is experiencing severe trade winds from several directions”.

So is the US dollar rising or dropping in value?

It depends who you ask, what news headline just dropped and maybe some auspicious or ominous sign from above.

You may have noticed that the more uncertain the economy, and any given market becomes, the more frantic they sound.

My news feeds are full of “Get out of the market!”, Get out of cash!”, “Get into (or out of) gold/crypto-currency/real estate!” headlines, warnings and “once in a lifetime” investment opportunities.

Their evidence is (usually) almost compelling. But the advice to invest/sell/buy now, or even leave the country is, at best, confusing and, almost consistently contradictory.

Some of this uncertainty has always been there.

What’s different is the velocity and intensity of the arguments.

Thanks to blogs, chat rooms and “talking heads” across the internet, we are light years away from your crazy uncle’s echo chamber talk radio or cable news channel.

Under what used to be called “normal economic circumstances” there were two polar barometers I would listen to; first, the Federal Reserve Board whose mandate from Congress is to develop and maintain “monetary policy in order to achieve its statutory mandate of maximum employment, stable prices, and moderate long-term interest rates”, and second, the average, or even cumulative, mood on the street of any given typical worker, shopper or neighbor.

The verdict is still out as to which one of the two is most reliable, better at preparing for opportunity, withstanding economic catastrophe or at least less susceptible to being bamboozled.

If you are interested in the fine print of the Federal Reserve Board I suggest starting here:

This particular document is from 2015. In some ways, this is like visiting an ancient, more simple economic system, but in other ways this is foundational, even prophetic.

Some aspect of every economy, from local to global, is recurring if not universal.

The Fed, or any other agency with a larger, global overview, sees things that the average consumer and worker may not.

But the opposite is also true; the worker at the neighborhood grocery store has a direct, lived, experience that the abstractions of a federal agency could never recognize. Or define. Or measure. Or control.

The proverbial man on the street goes to work, buys groceries and mows his lawn. If he’s lucky.

Our national unemployment rate has been dropping, but far too many of us are being pushed even closer to boundaries we never thought we’d see, let alone cross.

Foreclosure, eviction, unemployment and homelessness are on the horizon for more and more Americans.

Their economic anxieties, nightmares and sometimes literal realities are (most of the time) far from the abstractions and talking points of the academic think tanks and resort conferences at Davos.

For the man on the street, monetary inflation is no academic construct, it is the price of a gallon of gas or milk.

And again, that is if our proverbial man on the street is lucky, and employed, and has a neighborhood grocery store, and the store has what he wants on its shelves.

Because for more and more of us, on more and more days, those simple rituals of shopping for what we want when we want it are becoming more and more rare.

The decisions and policies of agencies, from interest rates to global monetary policies sift down to the rest of us.

The economic decisions we as consumers make drift up to, and into the vision parameters of the agencies – eventually.

The “experts” use terms like “accommodation” or transition” or, the one I hear almost daily lately, “inflection point” to describe what they can barely see in the ever-changing mists of economic variables.

For an analysis of economic trends that present, even if they don’t always clarify, our current economic terrain, I recommend Alhambra Partners.

The word “economy” has its earliest roots in the frugal and judicious management of an individual household.

How the decisions of those global conferences filter down to the average person, and as we all know too well now, the price and availability of basics like toilet paper or gas can make a world of difference in the economic well-being of all of us.

A working definition of an economist after all, is someone who gets paid to parse out the chaotic interactions of people, money, goods and services and conclude that they confirm his/her preconceived notions.

Sometimes their theories are so clever (or vague) that they seem to come true.

The average person makes decisions based on realities, even needs, far more than theories.

Their decisions may not always be the best, but at least they won’t bankrupt the country.