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Stephen Mihm

Strong Dollar Always Clobbers Developing Nations

History offers centuries of proof that overseas borrowing courts chaos when the US currency surges.

Going strong.

Going strong.

Photographer: Sean Gallup/Getty Images

The dollar is strong and getting stronger, hitting 20-year highs relative to a basket of other currencies. As my Bloomberg Opinion colleague Tyler Cowen recently noted, this is a vote of confidence in the US.

But history demonstrates that it’s also likely to be a harbinger of hard times for much of the rest of the world.