A. Gary Shilling writes about the credibility of the US dollar.  There aer eexternal reasons why hte dollar is storng now:  the devaluation of the euro and the yen, weakness in commoidty-driven securities, slower growth in China, the carry trade, the safe-haven appeal and the developiing economy woes.

But if you want an argument for democracy, even one that sometimes seems flawed to people living in the US, the country is  relatively transparent, kleptocracy, except for the current ascendancy of big banks, is kept low.

the principal force affecting imports and exports is the US is economic growth. When an economy is growing, consumers and businesses buy more of everything, especially imported products. The correlation between U.S. imports and the dollar is weak, but the relationship between imports and GDP is strong.

Yet the rising dollar has depressed U.S. corporate earnings. With 46 percent of S&P 500 company revenues coming from abroad, the strengthening greenback is negative in two ways. First, to the extent the dollar’s strength is due to weak foreign economies, foreign sales and earnings will be lower.

Second, foreign earnings convert to fewer dollars when the dollar is strong. U.S. companies with major foreign exposures include Alcoa, Ford, GM, Coca-Cola, McDonald’s, Wal-Mart and Procter & Gamble.

The rising greenback attracts foreign investment, which promotes domestic economic growth and a stronger currency. The appreciating dollar and stability of the U.S. continue to attract wealthy foreigners to the real estate market in New York City and elsewhere, even with the prospect of very low returns.

A climbing dollar encourages investment by foreigners in U.S. assets because of the currency gains on top of U.S. domestic appreciation and income. Also, the foreign money flowing into Treasuries, with their safe-haven appeal rivaling that of the dollar, helps keep interest rates low, to the advantage of the U.S. economy.

The dollar has been the primary trading and reserve currency since World War II and is likely to remain so for decades. Rapid growth in the economy and per-capita output weigh in the dollar’s favor. American financial markets are broad, deep and transparent, as is the economy. Despite the dollar’s decline since 1985, its credibility is substantial.  And there is no real substitute for the dollar as a global currency.