The Damocles Dollar |

In order to break the wave of inflation, the US central bank is raising interest rates sharply. The resulting strengthening of the dollar brings new problems – for indebted emerging countries.

Many a house or apartment buyer was caught on the wrong foot financially this year. Because after years of zero interest rates, the turnaround in interest rates happened unexpectedly quickly. The reason for this was the Russian war in Ukraine, which fueled inflation, which was already on the rise, due to the massive rise in energy prices. Central banks around the world had to react and raise interest rates. This particularly affected the US Federal Reserve Federal Reserve which has already raised interest rates six times since March, and they are now in a range of 3.75 to 4 percent.

For the USA, but also Europe, where the ECB acted similarly in a weakened way, this policy is correct and important. This is the only way to recover inflation, which has risen to decades high. However, the current monetary policy inflation therapy also has undesirable side effects. And these occur not only in the central banks’ own currency zones, but sometimes also globally.

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