The value of U.S. currency is going down,down,down. The dollar is drowning in global market and most students and experts of economic history know it is only a matter of time because either it implodes or just dissappears due to the political nature of consumerism that is left in the hands of politicians to manipulate.
Do you know how the value of the dollar is determined?
It is derived by three main methods of economic measurement:
1. exchange rates
2. Treasury Note value and interest rates
3. foreign exchange reserves (how many U.S. Dollars are held by other nations)
The U.S. dollar is losing value presently at a record rate, primarily due to the extremely high U.S. debt, which is rising daily. The high debt makes holding U.S. dollars a risky proposition for foreign investors (like China for example).
Recently China began calling in some of the debt holding it has on the U.S.
Germany has called for its 20 billion in actual gold bullion to be returned ASAP to them.
Who is next to call for a return because the American economy appears shaky? Arab oil nations maybe?
Thus the U.S. government must raise taxes to pay the debt or stop spending money it doesn’t have backed by gold. Which will it be? My money (what little I have) is on taxes rising.
Nations holding U.S. debt do not want to invest in America like they have in the past. They now see emerging nations as a good place to place their economic risks and investments on.
Here is an insider tip….
Why are gas prices rising suddenly? When the dollar value declines American made products are cheaper to acquire. Yes!
But this causes oil prices to increase as the oil producing nations that sell to us must charge more dollars for a barrell of oil to make the same profit they had been making when the dollar was worth more. Seems like a global money, game you think. Well, hold on to your wallet because the roller coaster ride has just begun.
You need to read what some astute non-partisan investors and economic strategists are saying.
Published in: Personal Finance