Strong dollar leaves trail of devastation the world over

A long-cherished dream for Atlanta native Stephanie Synclair was to buy a house in Italy. It came true in April, just months before the euro and the dollar reached parity.

“I would have never looked to buy in Italy if the market in the US hadn’t been so crazy,” Synclair, 40, said. She bought a house in Sicily, where she hopes to open a small but inviting eatery.

Inflation
With inflation in the US hovering around a 40-year high, the average price of a home in Atlanta reached $404,575 as of June 30, up 19% from the previous year. In Sicily, an 800-square-foot property costs just about 86,000 euros.

“Expensive home prices, as well as a strong dollar” are contributing to the “growing allure of Europe” among Americans, said Michael Witkowski of ECA International, a US-based expat consultancy.

European dream
Buoyed by the rising greenback, more and more Americans are looking to relocate to Europe.

Americans looking to move to Greece rose by 40% from a year earlier in the April-June period. US demand for homes in France and Italy is the highest in at least three years.

But that’s the flip side.

Destruction
The ascent of the dollar, the currency that powers global trade, has “left a trail of devastation” the world over, says Bloomberg. It’s driven up the cost of food imports, deepened poverty across the world; incited a debt default that toppled the government in Sri Lanka; sunk stock and bond investors in losses in financial capitals everywhere.

Roughly 40% of the $28.5 trillion in annual global trade is priced in the US currency—“the lubricant for global commerce.”

“There is simply no alternative to the dollar no matter where you look and it’s plummeting everything else as a result—economies, other currencies, corporate earnings,” said Vishnu Varathan of Singapore’s Mizuho Bank Ltd.