Guest Post: The Rising U.S. Dollar Will Be Corporate Earnings/Market-Negative

Via Charles Hugh-Smith of OfTwoMinds blog, Many large U.S. corporations derive 50%-65% of their revenues overseas. As the U.S. dollar rises, the foreign-exchange boost to overseas profits of the past decade will reverse.   One of the most glaring omissions in mainstream financial-media stock market commentary is the connection between the U.S. dollar's relative value and corporate earnings. I have often commented on this bullish consequence of a weakening dollar.    50%-60%+ of global corporate earnings and profits are non-U.S., i.e. booked overseas in a currency other than the U.S. dollar (USD). As the dollar weakened, global corporate profits skyrocketed as earnings in euros, yen, etc. rose when stated in dollars.   In other words, overseas profits expand as if by magic when stated in dollars.   When the euro and the dollar were 1-to-1 back in the earl...