Comments on: The Incredible Shrinking Dollar http://pajamasmedia.com/blog/why_the_falling_dollar_matters/ Tue, 24 Nov 2009 05:49:25 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Are You Worried About Socialism Taking Over Your Country? Join the Pitchfork and Torch Rally! « Facts Are Stubborn Things http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-139121 Are You Worried About Socialism Taking Over Your Country? Join the Pitchfork and Torch Rally! « Facts Are Stubborn Things Thu, 30 Oct 2008 01:35:21 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-139121 [...] markets through the creation of the Federal Reserve Board, which for far too long employed “easy” money policy that contributed to the “financial meltdown” and has devalued the [...] [...] markets through the creation of the Federal Reserve Board, which for far too long employed “easy” money policy that contributed to the “financial meltdown” and has devalued the [...]

]]> By: March 30, Sunday’s Headlines » The Partisan Report http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-27365 March 30, Sunday’s Headlines » The Partisan Report Sun, 30 Mar 2008 17:28:42 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-27365 [...] The Incredible Shrinking Dollar Picture the money that is in your checking account as you read this. Your bank is federally insured, but something strange is occurring […] [...] [...] The Incredible Shrinking Dollar Picture the money that is in your checking account as you read this. Your bank is federally insured, but something strange is occurring […] [...]

]]> By: Steve http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26686 Steve Thu, 27 Mar 2008 09:35:12 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26686 Great piece! Many of the older generation have definitely fallen victim to this monetary fraud. They feel their bank CDs are 'safe' because they are FDIC insured. If only the FDIC could insure 'purchasing power'. Great piece! Many of the older generation have definitely fallen victim to this monetary fraud. They feel their bank CDs are ’safe’ because they are FDIC insured. If only the FDIC could insure ‘purchasing power’.

]]> By: Robineus http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26583 Robineus Wed, 26 Mar 2008 19:07:15 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26583 The government reported inflation rate is more than a little suspect. The price of gold and oil, real commodities, indicate that inflation has been running rampant the past few years. It is likely only to be reported in the coming years, despite the fact that the real inflation has already happened. The government reported inflation rate is more than a little suspect. The price of gold and oil, real commodities, indicate that inflation has been running rampant the past few years. It is likely only to be reported in the coming years, despite the fact that the real inflation has already happened.

]]> By: muggsie http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26431 muggsie Tue, 25 Mar 2008 23:51:02 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26431 The article conflates inflation and the value of the dollar versus foreign currencies. Our level of inflation has been relatively low recently compared to the late 70's/early 80's. However our dollar is cheap against other currencies because we have low interest rates. But this helps us to export our goods and that helps our GDP. Exporters are very happy. The article conflates inflation and the value of the dollar versus foreign currencies. Our level of inflation has been relatively low recently compared to the late 70’s/early 80’s. However our dollar is cheap against other currencies because we have low interest rates. But this helps us to export our goods and that helps our GDP. Exporters are very happy.

]]> By: Sam http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26417 Sam Tue, 25 Mar 2008 22:46:04 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26417 It seems to me that a "global economy" requires a global standard of living and this is where we are headed. As a computer programmer who lives in constant fear of losing my job to cheaper foreign labor, this is probably the best outcome that I can hope for (not that it's good, just the best that I can hope for). The higher cost of labor in India (in dollars) along with the already high cost of managing outsourcing relationships will make me more competitive. I won't be able to afford consumer goods from Walmart anymore because they are all made in China, but at least I won't have to work there. It seems to me that a “global economy” requires a global standard of living and this is where we are headed.

As a computer programmer who lives in constant fear of losing my job to cheaper foreign labor, this is probably the best outcome that I can hope for (not that it’s good, just the best that I can hope for). The higher cost of labor in India (in dollars) along with the already high cost of managing outsourcing relationships will make me more competitive.

I won’t be able to afford consumer goods from Walmart anymore because they are all made in China, but at least I won’t have to work there.

]]> By: Wolf Pangloss http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26337 Wolf Pangloss Tue, 25 Mar 2008 16:00:59 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26337 Ken asks: <em>But how is the change in the price of dollar compared to other currencies relate to inflation? The title talks about the currency exchange rates, while the article talks of inflation. Are we really left to assume that they are one and the same?</em> Yes, the shrinking dollar means that the dollar is suffering from more inflation than the currencies against which it is measured. The starkest way to show this is to examine the cost of intrinsically precious metals. In terms of gold, it has gone from 250 dollars per ounce to 1000 dollars per ounce. That doesn't mean that gold has become that much more valuable, but that the dollar has become that much less valuable. Again, gas has gone from about $1 per gallon to $3 per gallon. This is not because OPEC has it out for us, though that is a problem, nor because China and India are increasing their demands, but primarily because the dollar is worth 1/3 the amount of oil it used to be worth. The culprit is loose money, as determined by the Fed's too low interest rates. The rates need to go up to stop US inflation and strengthen the dollar. The two things always happen in tandem. This will drive down the stock market and drive bonds upward, and it will not buoy up home prices, but it is necessary because otherwise we will see another 30% increase in the price of food from this year to next year, and even though food and energy prices aren't included in the phony baloney inflation computation they are real costs, real big costs, and whether it is counted as "official inflation" or not a 30% increase in costs year after year is hyperinflation. Nobody wants to live in a place like that. Ken asks:
But how is the change in the price of dollar compared to other currencies relate to inflation? The title talks about the currency exchange rates, while the article talks of inflation. Are we really left to assume that they are one and the same?

Yes, the shrinking dollar means that the dollar is suffering from more inflation than the currencies against which it is measured. The starkest way to show this is to examine the cost of intrinsically precious metals. In terms of gold, it has gone from 250 dollars per ounce to 1000 dollars per ounce. That doesn’t mean that gold has become that much more valuable, but that the dollar has become that much less valuable. Again, gas has gone from about $1 per gallon to $3 per gallon. This is not because OPEC has it out for us, though that is a problem, nor because China and India are increasing their demands, but primarily because the dollar is worth 1/3 the amount of oil it used to be worth.

The culprit is loose money, as determined by the Fed’s too low interest rates. The rates need to go up to stop US inflation and strengthen the dollar. The two things always happen in tandem. This will drive down the stock market and drive bonds upward, and it will not buoy up home prices, but it is necessary because otherwise we will see another 30% increase in the price of food from this year to next year, and even though food and energy prices aren’t included in the phony baloney inflation computation they are real costs, real big costs, and whether it is counted as “official inflation” or not a 30% increase in costs year after year is hyperinflation. Nobody wants to live in a place like that.

]]> By: John Tamny http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26298 John Tamny Tue, 25 Mar 2008 14:01:02 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26298 Most Americans don't watch the dollar per se, but they DO notice when the wages they earn buy less, and even more, they notice when their pay increases don't keep up with price increases. That's the shame of inflation. It's hidden when it comes to the paycheck, but then the paycheck has less value. Still, it's a basic truth that presidents and governments rarely survive dollar debasement. People point to Iraq, excessive government spending, and all manner of things, but the dollar is often paramount. Had it been stable under Bush, he would not be suffering the approval ratings that he is now. Most Americans don’t watch the dollar per se, but they DO notice when the wages they earn buy less, and even more, they notice when their pay increases don’t keep up with price increases. That’s the shame of inflation. It’s hidden when it comes to the paycheck, but then the paycheck has less value.

Still, it’s a basic truth that presidents and governments rarely survive dollar debasement. People point to Iraq, excessive government spending, and all manner of things, but the dollar is often paramount. Had it been stable under Bush, he would not be suffering the approval ratings that he is now.

]]> By: Lily S. http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26234 Lily S. Tue, 25 Mar 2008 04:57:22 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26234 You write very beautifully and this is such a wonderful piece! Lily S. Zrii For Life! http://zrii-for-life.blogspot.com/ You write very beautifully and this is such a wonderful piece!

Lily S.
Zrii For Life!
http://zrii-for-life.blogspot.com/

]]> By: Republicae http://pajamasmedia.com/blog/why_the_falling_dollar_matters/comment-page-1/#comment-26189 Republicae Mon, 24 Mar 2008 21:36:20 +0000 http://dev.pajamasmedia.com/blog/the-incredible-shrinking-dollar/#comment-26189 Ah, the falling dollar, there really is nothing like Fiat Money to devalue a monetary system of a nation, is there? Every single Federal Reserve Note must be borrowed into existence, whether that "dollar" is digital or physical, it must be borrowed in order to be put into circulation. Since ever single "dollar" is a legal notification of a debt obligation that basically makes it little more than an IOU. There is one major problem with a monetary system that totally relies upon debt as its foundation, eventually due to the over-zealous use the Federal Reserve's "printing press" and expansion of the money supply, the money will eventually enter into negative value and hyper-inflation will destroy all economic viability and thus prosperity, our prosperity. Evey Fiat Monetary System has an inherent maximum possible life-span, a termination point that is reached when the system reaches the boundries of mathematical law. The debt becomes so massive and irreversible that it consumes all economic growth and eats away at all economic activity until the system collapses. Every Fiat System in history has met the same fate, ours will be no different. Consider a few things: today it takes over $22,000.00 to purchase what $1,000.00 purchased prior to the 1913 Federal Reserve Act. Now, what has happened to all that real wealth? It has been systematically drained away from the People who labor long and hard to realize a living through the hidden tax called inflation. Consider this: a person making $32,000 per year today has the equivalent purchasing power of $5,907.40 1970 dollars. So, the same person making $15.38 per hour today is equal to making $2.84 per hour in real purchasing power in 1970 dollars. It is not the price of goods and services that have risen so much, but the purchasing power of our dollar that has been so drastically reduced. Our standard of living has been effectively reduced through fiat money inflation. Is there any wonder that poverty is becoming rampant? The government has no other choice but enforce minimum wages in order to keep the working poor at some level of subsistence. At the current $5.85 per hour a person has the same 1970 purchasing power of $1.08 per hour, at 40 hours per week that person is effectively making $43.20 per week to make ends meet. What are we waiting on, to become serfs of the State? The system that has been created by the Federal Reserve is little more than a Fuedal System of Peonage where the men and women of this country labor to pay continual rents to the "lords of the manor", with the money near negative value and the actual wealth being siphoned off to the Central Bank, the government and those fortunate few who are first in line at the FED's feeding trough. It has, in essence, become a vast system for the redistribution of wealth from those who produce to those who watch the rest of us produce. ARE YOU PISSED YET? No, well give it another couple of years and when hyper-inflation makes it impossible for you or I to buy a loaf of bread without spending a fortune, then you will be pissed, then you will rise up in rebellion and look for enough rope to hang those criminals who have done this to our country and this People! Ah, the falling dollar, there really is nothing like Fiat Money to devalue a monetary system of a nation, is there? Every single Federal Reserve Note must be borrowed into existence, whether that “dollar” is digital or physical, it must be borrowed in order to be put into circulation. Since ever single “dollar” is a legal notification of a debt obligation that basically makes it little more than an IOU. There is one major problem with a monetary system that totally relies upon debt as its foundation, eventually due to the over-zealous use the Federal Reserve’s “printing press” and expansion of the money supply, the money will eventually enter into negative value and hyper-inflation will destroy all economic viability and thus prosperity, our prosperity.

Evey Fiat Monetary System has an inherent maximum possible life-span, a termination point that is reached when the system reaches the boundries of mathematical law. The debt becomes so massive and irreversible that it consumes all economic growth and eats away at all economic activity until the system collapses. Every Fiat System in history has met the same fate, ours will be no different.

Consider a few things: today it takes over $22,000.00 to purchase what $1,000.00 purchased prior to the 1913 Federal Reserve Act. Now, what has happened to all that real wealth? It has been systematically drained away from the People who labor long and hard to realize a living through the hidden tax called inflation.

Consider this: a person making $32,000 per year today has the equivalent purchasing power of $5,907.40 1970 dollars. So, the same person making $15.38 per hour today is equal to making $2.84 per hour in real purchasing power in 1970 dollars. It is not the price of goods and services that have risen so much, but the purchasing power of our dollar that has been so drastically reduced. Our standard of living has been effectively reduced through fiat money inflation.

Is there any wonder that poverty is becoming rampant? The government has no other choice but enforce minimum wages in order to keep the working poor at some level of subsistence. At the current $5.85 per hour a person has the same 1970 purchasing power of $1.08 per hour, at 40 hours per week that person is effectively making $43.20 per week to make ends meet.

What are we waiting on, to become serfs of the State? The system that has been created by the Federal Reserve is little more than a Fuedal System of Peonage where the men and women of this country labor to pay continual rents to the “lords of the manor”, with the money near negative value and the actual wealth being siphoned off to the Central Bank, the government and those fortunate few who are first in line at the FED’s feeding trough. It has, in essence, become a vast system for the redistribution of wealth from those who produce to those who watch the rest of us produce.

ARE YOU PISSED YET? No, well give it another couple of years and when hyper-inflation makes it impossible for you or I to buy a loaf of bread without spending a fortune, then you will be pissed, then you will rise up in rebellion and look for enough rope to hang those criminals who have done this to our country and this People!

]]>