It probably won’t surprise you if I said the dollar doesn’t buy what it used to. However, our government is lying to us and giving Americans a very rosy picture of the future when the opposite is true. Now when I say “our government” I mean the Republicans, Democrats, Independents and any other flavor there might be. Here is what I mean.
First, I am certainly not a math wiz or economist, what I am is very curious about my country and how it works. When I hear something that sounds too good to be true, I feel compelled to see what the real story is. Here are my findings. First, the U.S. dollar is the “world reserve currency,” which means the dollar is what all countries use to buy goods from other countries. As an example, if Japan wants to buy sugar from Jamaica, it wouldn’t use the yen; it would use the dollar. If Brazil wants to buy electronics from Germany, they would use the dollar. American money is the world’s money.
Over the last several years, our government has been borrowing much more than it produces, so that we owe out much more than what we take in. This is what it means when the news reporters talk about the deficit. If you or I were to try that, we would a) wreck our credit quickly and b) get arrested if we continued to try. However, America is doing just that.
We are continuing to borrow – commonly through the sales of government-backed bonds or other guarantee. Now America has reached the point where the other countries are beginning to get worried about the value of our dollar.
One good way to see this is to look at the price of commodities. Gold, silver, oil, and natural gas – all are rising at a very rapid rate. Why? Those countries and those who are the “super-rich” are shedding the dollar as an investment and turning to other, safer areas.
What does this mean to you and me? If – and the possibility is very real – the American dollar is no longer the world reserve currency, the value of the dollar would immediately drop by around 25 percent. The cost of what we buy from overseas would go up correspondently. Since June of 2010, the value of the dollar has dropped as much as 13 percent in some areas.
The Wall Street Journal in its commodities section listed 88 major items that we buy regularly – 85 are up over the same time as last year, some by over 50 percent. Oil is up more than 50 percent from a year ago. Silver is up more than 100 percent –so is cotton, and coffee. Tin is up 90 percent. Oats are up more than 70 percent. So is wheat.
We will have hyperinflation with the stock market losing as much as 40 percent overnight. What loans that were available would dry up and the money that you and I might still have stashed away somewhere would be worth less by perhaps 50 percent.
What can we do? We must understand that everything is on the table as regards budget cuts. If America cannot dig its way out of the hole it is in, we may face a situation where we would have to turn to our military to “persuade” other countries.
Tell your Congressmen that you want them to do what is necessary to get America and her currency out of the hole it is in and back in strong shape for the future. No matter what, the next 20 years are going to be very rough. That much I am sure of. Tighten your seatbelts, it will be a very “interesting” ride!