Never let the facts get in the way of a good story might be good advice in journalism, but it is inexcusable in the financial markets. How many other fields have such a wealth of readily available facts?

Yet market myths and legends abound. Consider the primary one about the U.S. dollar that its long-term depreciation is connected to the so-called twin deficits of the current account and the federal budget. But is there any evidence supporting this conclusion?