Thursday, December 7, 2006

Why is the dollar losing value?

The dollar is losing value because of the federal reserve, the treasury department and our irresponsible government that keeps growing and growing and growing. Kind of like the energizer bunny. It just keeps on growing and spending.

That is why it is always funny to hear the likes of big Ben Bernanke saying that they are vigilant in the fight against inflation. They are the ones responsible for inflation and in fact, without our governments reckless spending which promotes inflation, our government wouldn't even need the Federal Reserve to print up all that money for them to borrow.

Read Ron Paul's article below because he sums it up nicely. In fact, Ron Paul is one of the only responsible individuals left in our government today. He speaks the truth but few care to listen.

December 4, 2006

Author: Ron Paul

The financial press reported last week that the value of the U.S. dollar plummeted to a 14-year low against the British pound, and weakened against the Euro and Yen. Many financial analysts predict continued rough times for the dollar in 2007, given reduced expectations for economic growth at home and less enthusiasm among foreign central banks for holding U.S. debt.

This decline in the value of the dollar is simple to explain. The dollar loses value as the direct result of the Federal Reserve and U.S. Treasury increasing the money supply. Inflation, as the late Milton Friedman explained, is always a monetary phenomenon. The federal government consistently wants to spend more than it can tax and borrow, so Congress turns to the Fed for help in covering the difference. The result is more dollars, both real and electronic-- which means the value of every existing dollar goes down. (Read the rest of the story here)