Impact of the Dollar Decline
It is hard for most Americans to get a grasp on what has been happening with the dollar.
It's not like the stock market where its price is quoted on the nightly news.
Now if you frequently travel abroad - you have a better understanding.
Your dollar buys less stuff every time you step off the plane, but that's a relatively small number of people.
Regardless to what Bernanke says about inflation - people are quite aware that prices are going up more than 2-3%.
However, most have not connected the dots.
I like how U.
S.
Representative Ron Paul describes the situation.
"This decline in the value of the dollar is simple to explain.
The dollar loses value as the direct result of the Federal Reserve and U.
S.
Treasury increasing the money supply.
Inflation, as the late Milton Friedman explained, is always a monetary phenomenon.
The federal government consistently wants to spend more than it can tax and borrow, so Congress turns to the Fed for help in covering the difference.
The result is more dollars, both real and electronic-- which means the value of every existing dollar goes down.
" Whether people realize it or not, we experience the impact of the declining dollar every day.
Dollar goes down - prices go up.
So what is one to do? First read as much as possible.
Here is a good place to start dollar collapse .
com [http://www.
dollarcollapse.
com/site/gstarted.
asp] The following is from the web site.
"Now, what does a collapse in the value of the dollar mean for your finances? Many things, mostly bad but some potentially very good.
First, it hurts people on a fixed income, because the value of each dollar they receive plunges.
Ditto for those who are owed money, because they’ll be paid back in less-valuable dollars (hence the disaster about to hit many banks).
Bonds, which are basically loans to businesses or governments that promise to make fixed monthly payments and then return the principal, will be terrible investments, since they’ll be repaid in always-depreciating dollars.
For stocks and real estate, the picture is mixed, with a weak dollar helping in some ways and hurting in others.
" Secondly, get serious about putting at least 10% of your assets in gold.
Gold moves inversely to the dollar.
More from the web site.
"The only unambiguous winner is gold.
For the first 3,000 or so years of human history, gold was, for a variety of still-valid reasons, humanity’s money of choice.
As recently as 1970, it was the anchor of the global financial system.
And since the world’s economies severed their links to the metal in 1971, it has acted as a kind of shadow currency, rising when the dollar is weak and falling when the dollar is strong.
Not surprisingly, gold languished during the 1980s and ’90s, drifting lower as the dollar soared, and being supplanted by the greenback as the standard against which all things financial are measured.
But now those roles are about to reverse once again.
In the coming decade, as the dollar suffers one of the great meltdowns in monetary history, gold will reclaim its place at the center of the global financial system, and its value, relative to most of today’s national currencies, will soar.
The result: Gold coins, Gold-mining stocks, and gold-based digital currencies will be vastly better ways to preserve and/or grow wealth than dollar-denominated bonds, stocks, or bank accounts.
" Got gold!
It's not like the stock market where its price is quoted on the nightly news.
Now if you frequently travel abroad - you have a better understanding.
Your dollar buys less stuff every time you step off the plane, but that's a relatively small number of people.
Regardless to what Bernanke says about inflation - people are quite aware that prices are going up more than 2-3%.
However, most have not connected the dots.
I like how U.
S.
Representative Ron Paul describes the situation.
"This decline in the value of the dollar is simple to explain.
The dollar loses value as the direct result of the Federal Reserve and U.
S.
Treasury increasing the money supply.
Inflation, as the late Milton Friedman explained, is always a monetary phenomenon.
The federal government consistently wants to spend more than it can tax and borrow, so Congress turns to the Fed for help in covering the difference.
The result is more dollars, both real and electronic-- which means the value of every existing dollar goes down.
" Whether people realize it or not, we experience the impact of the declining dollar every day.
Dollar goes down - prices go up.
So what is one to do? First read as much as possible.
Here is a good place to start dollar collapse .
com [http://www.
dollarcollapse.
com/site/gstarted.
asp] The following is from the web site.
"Now, what does a collapse in the value of the dollar mean for your finances? Many things, mostly bad but some potentially very good.
First, it hurts people on a fixed income, because the value of each dollar they receive plunges.
Ditto for those who are owed money, because they’ll be paid back in less-valuable dollars (hence the disaster about to hit many banks).
Bonds, which are basically loans to businesses or governments that promise to make fixed monthly payments and then return the principal, will be terrible investments, since they’ll be repaid in always-depreciating dollars.
For stocks and real estate, the picture is mixed, with a weak dollar helping in some ways and hurting in others.
" Secondly, get serious about putting at least 10% of your assets in gold.
Gold moves inversely to the dollar.
More from the web site.
"The only unambiguous winner is gold.
For the first 3,000 or so years of human history, gold was, for a variety of still-valid reasons, humanity’s money of choice.
As recently as 1970, it was the anchor of the global financial system.
And since the world’s economies severed their links to the metal in 1971, it has acted as a kind of shadow currency, rising when the dollar is weak and falling when the dollar is strong.
Not surprisingly, gold languished during the 1980s and ’90s, drifting lower as the dollar soared, and being supplanted by the greenback as the standard against which all things financial are measured.
But now those roles are about to reverse once again.
In the coming decade, as the dollar suffers one of the great meltdowns in monetary history, gold will reclaim its place at the center of the global financial system, and its value, relative to most of today’s national currencies, will soar.
The result: Gold coins, Gold-mining stocks, and gold-based digital currencies will be vastly better ways to preserve and/or grow wealth than dollar-denominated bonds, stocks, or bank accounts.
" Got gold!
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