If inflation in the US is at an all time high, how is value of dollar rising ?

Submitted by PestiferousOpinion t3_yeof0i in wallstreetbets

I came across a post on twitter which had the following data on US inflation rate

2022: 8.2%

2021: 7%

2020: 1.4%

2019: 2.3%

2018: 1.9%

2017: 2.1%

2016: 2.1%

2015: 0.7%

2014: 0.8%

2013: 1.5%

2012: 1.7%

2011: 3.0%

2010: 1.5%

2009: 2.7%

2008: 0.1%

2007: 4.1%

2006: 2.5%

2005: 3.4%

2004: 3.3%

2003: 1.9%

2002: 2.4%

It seems inflation is at an all-time high, but I've also read that the value of dollar is rising. How is this possible? It would be great if someone shared some insight which would be intelligible to an 18-year-old.

3

Comments

You must log in or register to comment.

VisualMod t1_ityzz47 wrote

User Report
Total Submissions 2 First Seen In WSB 7 minutes ago
Total Comments 0 Previous DD
Account Age 3 weeks [^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.) [^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
Vote Spam Click to Vote Vote Approve Click to Vote
1

VisualMod t1_ityzzhu wrote

>The answer is simple. The US dollar is rising because inflation is at an all-time high. When inflation is high, the value of money goes down. So, when the value of money goes down, the price of goods and services go up. This causes people to demand more dollars in order to buy things, which drives up the price of the dollar.

−4

tudy1311 t1_itz0lu6 wrote

You can also consider, maybe the value of the other currencies is plummeting faster? Someone pls correct me if I'm wrong.

12

0x11C3P t1_itz0sgc wrote

Because you're taking a very limited view on the dollar and only looking domestically.

USD is a reserve currency for the world. When the Fed raises interest rates, the dollar strengthens because you can earn passive income on that dollar compared to worldwide local currencies.

The greenback is just simply almighty.

12

jols69 t1_itz0txs wrote

Another factor to consider is that the dollar is considered a safe haven investment. With markets in turmoil the world flocks to the dollar

3

Soul_Token t1_itz1c68 wrote

When the Fed raises interest rates, the cost of USD goes up and the supply goes down. This is disinflationary for the market because the cost of doing business is more expensive and less profitable.

0

UltimateTraders t1_itz1ceu wrote

Interest rates rising puts the value of the dollar higher

2

OnlyStockGrowth t1_itz3kqr wrote

Europe is doing badly because of energy prices. Chinese are still in the covid lock-down. Others have national debt in dollars, so they are screwed for the strong dollar and don't have money. Everybody is screwed.

1

Kickinitez t1_itz3rr2 wrote

Much like stocks, the Brrrrr dollar only goes up! Or something like that...

1

Little_Yellow_8116 t1_itz3w09 wrote

ELI3: The dollar is valued in terms of other currencies, and other currencies suck more

ELI5: interest rate differentials

3

unAcceptableshthed t1_itz4nxw wrote

Other currencies crashing people fleeing to us. Dollar..... should be moving into btc instead

1

fourpilltherapy t1_itz4ooj wrote

The value of the dollar is not rising.

You can buy less stuff for the same amount of dollars since last year (assuming you don't eat other currencies).

1

Healthy-Mind5633 t1_itz5n8u wrote

Rate differentials with other countries favor owning dollars. The Fed raising rates quicker than other is pulling in capital.

2

0x11C3P t1_itz7s1y wrote

Replying to HotdogsArePate (#255,650)

Once global economies implodes next year and dollar continues to strengthen, I'm TOTALLY not going to live like a degenerate and buy up a bunch of hookers & drugs w/ USD for a week.

1

yaboyalaska t1_itz8avu wrote

Because inflation in the rest of the world is compatibly worse.

0

d00ns t1_itzd7ix wrote

It's only rising in comparison to other currencies, in terms of goods and services, it is down 8% since last year

2

Dubante_Viro t1_itzdw0y wrote

Read up on the Dollar Milkshake theory.

2

UX-Edu t1_itzu2zf wrote

Replying to 0x11C3P (#256,175)

If you go to the right country you’ll be able to live like a king for years and years until your compound is raided by locals whose hovels have been flooded or burned down or are simply starving due to perpetual drought brought about by unchecked climate change. They will liberate their daughters from your sex dungeon and string you up by your own designer sheets in the street. As you choke to death on your own viscera your last thought will probably be “shit was pretty sweet right up until this point.”

At least that’s how I recommend you do it. Try somewhere in Southeast Asia or Latin America.

2

Fibocrypto t1_iu0e2xp wrote

US inflation is Not at an all time high

1

Such-Wrongdoer-2198 t1_iu10evf wrote

The biggest driver of inflation worldwide are currently energy, weapons and food.

The US is a major exporter of all three. So even if the US is suffering inflation, everyone else will feel it worse.

1

Opening_Corner1899 t1_iu1gwdi wrote

Value of the dollar is rising in respect to what? Shittier currencies? What about the value of a dollar in respect to an 8oz steak or a gallon of gasoline?

1

Toiletboy4 t1_iu3cdis wrote

It’s the value of the dollar when compared to other currencies. Europe got rocked and others as well. Dollar is the ‘safe haven’ but soon they’ll realize all their issues are here too, and much worse

1