A decreasing demand for Treasury bonds will also help the Fed as they try to increase interest rates. To continue selling so many Treasury bonds, we will see interest rates rise, to encourage buying. Also, a cheaper dollar makes imports more expensive, which “imports inflation,” which can be controlled with higher interest rates.
At the same time, foreigners increased their holdings of American equities by $12 billion in November and a record-breaking $48.6 billion over the three-month period. So much for that no-confidence vote, huh? It tells me that foreigners believe the increase in stock market values will more-than-offset the loss from the falling dollar. That may be a vote of confidence, reflecting improving economies worldwide, not just the U.S. economy.
The Good Times are rolling!