Beware of a Strong Dollar

Strong is good.

Strong earnings. Strong sales. Strong demand. Strong orders. These all paint a picture of economic growth, which is good for the country.

But when it comes to the U.S. dollar in a global market... strong is a problem.

The U.S. dollar has been on a tear recently, soaring higher against the other major currencies so that the U.S. Dollar Index is now up 4.3% in 2016. While that doesn't sound like much when you look at the Dow Jones Industrial Average, which has enjoyed a double-digit gain this year, you have to remember that currencies don't make huge moves. At least, they normally shouldn't.

Now the dollar is nearing parity with the euro, which has its own basket of troubles as the union threatens to pull apart at the seams. Currency analysts at Deutsche Bank are actually calling for the euro to trade below parity with the dollar in 2017, falling to $0.95.

But a strong dollar means that U.S. goods sold overseas are now more expensive, making them less competitive with local goods. Companies are either faced with slashing their prices overseas to stay competitive - which results in less revenue - or keeping their prices unchanged and risking fewer sales. Either way, the picture isn't good.

Multinational corporations are going to see their earnings squeezed even further in the coming quarters as their foreign sales take a hefty hit.

And the dollar's strength is unlikely to wane anytime soon. The Fed's interest-rate hike just made the dollar more attractive, increasing demand. The Fed has said that it's looking to raise rates three times in 2017 - not that I'm actually looking for that to happen. Remember that the Fed stated at the start of this year that we'd see four rate hikes.

The latest economic reports showed some nice strength, but if the U.S. dollar continues its climb against the other currencies of the world, we could see our multinational companies flounder... triggering an economic collapse.

The Fed may be choosing to ignore the data right in front of it, but you can't. The center cannot hold. This economy will soon fall apart. But you don't have to let your wealth get crushed under the rubble. That doesn't mean you need to stuff all your cash under your mattress for safekeeping. You can take steps now to not only protect your wealth from the coming collapse, but even position yourself to profit as well.

As the Senior Managing Editor for The Sovereign Investor Daily, Jocelynn handles the day-to-day operations for bringing you the Sovereign team's daily insight. She has spent over a decade working as an editor for financial publications. A former trader, Jocelynn has spent 15 years in the financial industry.
By Jocelynn Smith

Economic Development Assistance Brings Back the American Dream

It all starts with a dream. You have an idea, you start a business, you work hard, and you send your kids to college. For many, the American Dream has increasingly become difficult to attain. It is harder for the average American to navigate the country's economic climate. Regional institutions, such as a city's Chamber of Commerce or a state's Economic Development branch, provide Economic Development Assistance services and incentives. Representatives from these institutions act as mediators between aspiring professionals and the challenges of the modern marketplace, and they even arrange for more commercial interactions. Natural "solopreneurs" still emerge, but having help drastically improves one's chances of success.

Individual Success Fosters Overall Market Success

Leaders cannot ignore the crucial role companies play in the overall well-being of their communities. When businesses do well, the entire economic ecosystem flourishes. Small businesses have generated over 65 percent of the nation's net new jobs since 1995. Keeping this in mind, it is in everyone's interests to have several robust and thriving companies operating or headquartered within a community. Furthermore, higher employment rates generally correlate with lower crime rates. The continued growth of economic opportunities is essential for the health of any region. Still, these benefits cannot come to fruition unless commercial operations begin. That's where Economic Development Assistance comes in. These services can help guide both entrepreneurs and large corporations through site selection, government contract documentation, financing options, incentives, and more.

Incentives Fuel the Dream

Areas seeking to see a spurt in economic growth often offer incentives. Economic Development Assistance programs highlight these opportunities and provide information on how to take advantage of these rewards. Some incentives are offered in general terms to every commercial enterprise in the district. In other cases, a local municipality may offer specific tax breaks to attract a certain operation. It is important for site selectors to take regional tax practices into account, as higher costs can restrain growth.

It's an Interactive World

Many times, institutions are excited to connect people in the local business community. Some contemporary urban planning designs even incorporate creative collision zones. These areas are strategically located in business districts. The collision zones feature paths and sidewalks where professionals walk and naturally cross paths. The concept behind this urban planning theory is that with increased natural interactions, professionals will have more chances to interact and potentially collaborate. By creating interactions, city planners are creating more economic opportunities for their communities. Besides these physical interactions, institutions also hold regular networking events and meetings to promote Economic Development Assistance programs and offers. By spreading the word, more entrepreneurs will become more aware of potential services tailored to help them succeed.

Information Age

Even with the availability of local statistical information, it can be difficult to understand and interpret the regional economic climate. Economic Development Assistance institutions actively work to make this information obtainable through, for example, infographics and animated charts, which are much more useful than raw data. They may also offer interactive platforms, which allow individuals to collaborate with current leaders and other potential professional allies.

By acting as a liaison between local assets and potential developers, Economic Development Assistance representatives increase the likelihood of success for both the developers and the region as a whole. As long as existing companies can be sustained and new firms can emerge, the American dream can survive.

When considering economic development assistance, Flint MI residents visit Flint & Genesee Chamber of Commerce. Learn more at http://www.flintandgenesee.org/