October 7, 2009
As always, there's just too much to talk about here. I went online Monday to discover this headline story at FoxNews: Dollar's Demise. I then went to the all the other mainstream media news web sites and there was not one thing on the home pages about this. When an important story like this that's directly tied to your financial security and future is not on the radar screen of your primary news source, you better start second guessing who you get information from.
I'm not an economist, but I happen to read up on economics and things like this. I didn't study economics in college. My education is by observation. One of my sources is a man who produces a newsletter in Australia called The Privateer. He's been predicting this event for years, and in the past few months has been really pounding this topic. The bottom line is this: for years, many years, going back over quite a few administrations and Congresses, we, as a country, have been breeding a weak dollar. That happens when you have too many of them. Scarcity helps creates worth. Abundance does the opposite. In simplest terms, think about a one-gallon bucket of beach sand vs. the same bucket filled with gold dust. The sand is virtually worthless because there is so much of it readily available.
Think what's been happening over the past twenty years. What kind of deficit spending has been going on here in the USA? For a short time, President Clinton did have a surplus year or two I believe, so he's to be complemented for that. But since then, the Congresses and our Presidents have been on a spending spree. They are spending money that's not yet been created. How's that possible you ask? Easy. Sell promissory notes. We happen to officially call them US Treasury Bills or Bonds. It's a simple piece of paper that says a person or country will get back a fixed amount of US money plus some extra in the form of interest. The interest is the money you and I have not yet created.
But what's happened over the past ten months? Our Congress, with the encouragement of our President, has quadrupled our annual deficit and quadrupled our National Debt. They are spewing money in the form of US Treasury Bills onto the market at a pace never seen before in history. All of this extra money is devaluing the US Dollar. It's making what little you and I might have in savings worth less.
It gets worse. This practice usually leads to inflation. Inflation is a funny thing. If you have a fixed debt or loan (US Treasury Bills are such a beast), then inflation is sort of a good thing. Inflation allows you to pay off loans with cheaper dollars. When inflation happens, you tend to have your wages raised to help offset the higher cost of things you buy each day. The government can initiate inflation any number of ways, just as the free market can. Think about that. The government can trigger inflation to help take the sting out of paying for the T-Bills that will come due in the future.
So if you have things you want to sell - say oil (Middle East, Russia, South America, etc.), manufactured products (China, India, etc.), food (South America, etc.), then you probably don't want to exchange your products for a currency that is suspect or losing value. That's what's starting to happen. That's what the story at Fox is all about.
How can we turn this around? Easy. We kick out of office anyone who thinks nothing of deficit spending. We elect people who will govern like you and I run our households. We only spend what we make each week, right? The USA is going - or is - bankrupt. I've been waiting for this story for months. If you've been a subscriber for some time, you know I've already talked about this. We MUST STOP spending money we don't have. You can't sustain that type of economic policy in your own life, so why in the world would you think collectively - We the People - can get away with it?
I can already see the emails I'm going to get: "What about the billions spent on the useless wars, Tim!" Well, that's a great question. Go look in the Congressional Record to see WHO voted Yes to fund those wars. Congress has to approve the spending to go to war. A vast majority of those in office now voted Yes to spend the war money. I could go on and on.
For the security and preservation of your own financial future and that of your children and grandchildren, I BEG you to write to your Senators and your Congressman/woman TODAY. Provide the link to the Fox story. Tell them how you feel about spending money we don't have. Tell them who you'll vote for next time around.
Contact your Congressman/woman.
Contact your Senators.