DXY Measures Demand; Not Strength nor Value
DXY Measures USD Demand against other Fiats; Not Purchasing Power, Intrinsic Value or Strength.
by Dillon Critique from; (SUBSTACK)
February 27 2025
https://blackboxpolitics.substack.com
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The DXY does not measure the strength, relative strength, value, nor purchasing power of the USD.
The DXY measures DEMAND for USD currency against other Fiats
The DXY measures the DEMAND for USD AGAINST other Fiat currencies demand.
Demand is not the same as, strength, value or purchasing power.
Many incorrectly call this INCREASED DEMAND for dollars or say that a rise in the DXY causes or is a, “Strong Dollar”, “Stronger Dollar”, “Dollar Strength” etc.
This is incorrect.
The Dollar is not strong, nor gets stronger or gains any strength/value as the DXY rises…
Just demand.
This is why some people get confused when they notice their standard of living continuously going down rapidly at the same time they keep hearing that the “Dollar is strong”.
That’s because the USD is not strong in terms of actual Value or purchasing power.
Why is the USD not strong when the DXY rises?
Demand for the USD (DXY) can increase while the USD’s actual strength, value or purchasing power plummets; as is currently & has been happening for quite some time as documented on this Substack.
There is a large difference between Strength, Value & Demand in the context of money/currency.
As Warren Buffett stated…
Strength, Value, & Demand are three separate words with three separate definitions, although similar.
Even as the DXY goes up, the ACTUAL purchasing power or ACTUAL strength or value of the USD, goes down.
No real actual strength or value is achieved with a higher DXY.
Again, just demand.
Why?
The USD is continuously being debased second by second, day by day, year by year by the Federal Reserve Central Bank by way of Quantitative Easing or programs like “Operation Twist”.
All fiats globally are being debased purposely, making way for what I call the new, “Digital Monetary Surveillance System Economy" DMSSE Crypto”.
The Dollar has been Hyperinflating since 2020 (link 1&2&3).
The USD DXY (DEMAND) will continue to go up because the dollar is, has been & continues Hyperinflating; until the currency is no longer used en mass/switch to a new monetary system, as currently is & has been takin place as documented on this Substack.
A Hyperinflating Dollar means it takes more & more dollars at an ever-rapid increasing pace, to buy something, keep your current standard of living or whatever situation you find yourself in.
That creates an artificial demand for dollars; driving the DXY higher, as the ACTUAL PURCHASING POWER, INTRINSIC VALUE or STRENGTH DECLINES.
You can also have a lower DXY (less demand) & still have a Hyperinflating currency if the Central Bank is still creating currency ‘out-of-thin-air’ in any capacity. Regardless of whether that currency makes its’ way into the real economy or not.
Why?
The original Austrian Economic definition of Inflation since the mid 1800’s has been: an expansion of the currency or money supply.
Case in point being that…
Debt aka (inflation: expansion of currency supply) has increased every year substantially since 1913 with the inception of the Federal Reserve Central Bank.
That is to say that currency debasement/expansion has been an ever-increasing variable that has remained constant & continuous as DEMAND aka (DXY) fluctuates up & down.
Because Inflation/Debt has been constant and continuous as seen in the above chart, so has the decline of the USD’s actual strength, value & purchasing power, regardless of a higher or lower DXY.
That is because the DXY does not measure strength, value or purchasing power of the USD…
…just DEMAND against other fiats while Americans standard of living continuously & rapidly declines.
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