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Strong dollar could be a nightmare for world economy

Mount Equity Group Tokyo Japan > News > Markets > Strong dollar could be a nightmare for world economy

Economists warn that a strong dollar could be a nightmare for the world economy, Fortune reported.

“What is clear is we have this relentless increase in yields, this relentless appreciation of the dollar. They are both bad news for corporates and for the economy,” Mohamed El-Erian, the president of Queens’ College at the University of Cambridge, told CNBC on Monday.

He said that when the entire developing world is “on fire”-and now even in places like the U.K.-the dollar is the currency of last resort for investors.

“The reason why this last leg up in the dollar is happening is because we are the safe haven and one consequence of that is our currency gets stronger,” he said.

This isn’t the first time El-Erian has warned of the potentially catastrophic consequences of a rising U.S. dollar.

In a Sept. 6 Washington Post article, El-Erian explained that a strong dollar can be a “mixed blessing.” On the one hand, dollar…

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