JRMI: Jerry Robinson Ministries International
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A Warning to U.S. Citizens on the Falling Dollar
Written by Jerry Robinson
Originally Posted on 10/23/2007
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It seems that nearly every day, American citizens are being exposed to the fact that their once dominant currency is now being systematically devalued. To economists who actually pay attention to such mundane things as currency markets and Federal Reserve reports (like me), the news that the dollar is in a consistent downward spiral is not really news at all.
The fact is that the dollar is continuing to sink in value in comparison to other global currencies and has been since 2002. And the reasons for the declining value of the "almighty" dollar are crystal clear. Consider the following problems plaguing the U.S. economy:
- Ballooning current account and fiscal deficits
- Dependence upon $70 billion/monthly in foreign capital inflows
- Positive market valuations coupled with murky earnings
- Questionable corporate governance
- An extremely volatile political landscape
Put simply, the U.S. has created its own currency problems through poor monetary policy and irresponsible fiscal policy. Too many dollars are in global circulation and some would even suggest that they are in the wrong hands (i.e. foreign central banks.) Our current global Dollar standard can be blamed on a fiat currency system which deserted the gold standard in the 20th century. All such fiat currency systems eventually fall... and fall hard. History has proven this to be true over and over again. Without a standard of some sort (i.e. gold, silver, etc) to attach to a country's money supply, irresponsible governments in the past have printed excessive amounts of money which eventually leads to the downfall of their currency.
In our modern day example of the U.S., what restrains the Federal Reserve from injecting too many dollars into the system? Nothing. Every country without a currency standard always falls prey to the temptation to overprint their currency. And when they overprint, the currency loses value. And when the currency loses value, purchasing power is weakened causing all types of fun macroeconomic puzzles to solve. Such is the case in the United States.
So as long as the debt-loving, interest-rate cutting, currency-printaholic Feds can’t seem to find the “off” switch on the printing press, the dollar will continue to decline in value and in purchasing power. However if it continues to decline - and many economists and power players tend to think that it will (Warren Buffett, Bill Gates, Stephen Roach, Jim Rogers, George Soros, Marc Faber, etc.) - is there anything that everyday folks like you and I can do to protect ourselves from its decline?
That was one of the many topics at a seminar that I hosted this weekend entitled: "The Perfect Storm: 5 Economic Trends That Every American Should Be Aware Of." In this seminar, I together with a panel of other economic experts, showed people just like you how to safeguard your current assets from such a decline - and how to even profit from the eventual demise of the dollar.
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