Thread: The dollar to keep fall fall falling.....

Well, the Fed has created $4T out of thin air under Bush, what do people expect considering M3 only totaled about $11T to begin with.

Oil near $143 on view dollar will keep falling - Yahoo! News

How long before we are burning wheelbarrows full of $100 bills just to stay warm?

This rise had nothing to do with the Fed this time. They didn't lower interest rates at all, so should have little effect on the dollar overall. The fact that inflation is hitting the US in high numbers is more likely the cause. The US is feeling inflation bigtime, not only at the gas pump, but at grocery store, big time. And the fact that we still can't drill, that plays a part for sure. Whenever the dollar loses value, as it did today against the EURO to some extent, commodities such as oil will likely follow.

Originally Posted by Grez

This rise had nothing to do with the Fed this time. They didn't lower interest rates at all, so should have little effect on the dollar overall. The fact that inflation is hitting the US in high numbers is more likely the cause. The US is feeling inflation bigtime, not only at the gas pump, but at grocery store, big time. And the fact that we still can't drill, that plays a part for sure. Whenever the dollar loses value, as it did today against the EURO to some extent, commodities such as oil will likely follow.

What do you think inflation is? Do you think it just magically happens? Inflation is caused by one thing and one thing only, devaluing the dollar by printing more of them and the market adjusting to the increase in fiat currency.

Indeed, but remember, as things get worse for us, they become better for foreign investors. Which seems to be what our government is after. (I'm not sure why. A simple solution would be to raise interest rates and then let the economy rebuild on its own. Of course, there is so much regulation now that the economy may no longer be capable of rebuilding on its own).

Originally Posted by Burning Giraffe

Indeed, but remember, as things get worse for us, they become better for foreign investors. Which seems to be what our government is after. (I'm not sure why.

One step closer to world government and a complete loss of sovereignty and rights for U.S. citizens?

A simple solution would be to raise interest rates and then let the economy rebuild on its own. Of course, there is so much regulation now that the economy may no longer be capable of rebuilding on its own).

Who is going to do that when they can just create wealth out of thin air and tax us at will with no recourse?

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)

Pretty apropos even though written over 200 years ago. Yet so many people want to claim our Constitution is somehow outdated. I would say it's pretty much right up to the minute.

Originally Posted by Libre

Pretty apropos even though written over 200 years ago. Yet so many people want to claim our Constitution is somehow outdated. I would say it's pretty much right up to the minute.

I could not agree more!

Originally Posted by Libre

What do you think inflation is? Do you think it just magically happens? Inflation is caused by one thing and one thing only, devaluing the dollar by printing more of them and the market adjusting to the increase in fiat currency.

Yes, printing is a problem, and has been part of the problem overall for the decline over the long term. This most recent decrease in the dollar wasn't made directly by the Fed, although their lack of action probably did decrease the value of the dollar because there is no real sign of recovery, so I will say that the Fed non-action probably did play a part. The dollar is not the only thing that leads to inflation. The crops that likely have been lost in the midwest, will lead to inflation of corn and soy products, despite the value of the dollar. Corn is used for tons of things, including feed for chickens and other animals, corn fructose, ethanol etc, Not to mention movement of goods down the Mississippi River has been stopped altogether. The tomato problem also adds in. Everything has to be figured. This eventually leads to businesses having to add in increased salaries or dolllars/hour. This also leads to inflation. There are many aspects, the fed alone does not lead to inflation, although they definitely have made it worse.

Originally Posted by Grez

Yes, printing is a problem, and has been part of the problem overall for the decline over the long term. This most recent decrease in the dollar wasn't made directly by the Fed, although their lack of action probably did decrease the value of the dollar because there is no real sign of recovery, so I will say that the Fed non-action probably did play a part. The dollar is not the only thing that leads to inflation. The crops that likely have been lost in the midwest, will lead to inflation of corn and soy products, despite the value of the dollar. Corn is used for tons of things, including feed for chickens and other animals, corn fructose, ethanol etc, Not to mention movement of goods down the Mississippi River has been stopped altogether. The tomato problem also adds in. Everything has to be figured. This eventually leads to businesses having to add in increased salaries or dolllars/hour. This also leads to inflation. There are many aspects, the fed alone does not lead to inflation, although they definitely have made it worse.

You are confusing inflation with the principle of supply and demand.

Maybe, but I think its all related. I agree, the fed is the main culprit, but unfortunately they are related. When they happen at the same time, thats when it causes problems. Less supply may equal more demand, but that equals more dollars needed to buy which equals inflation. When the dollar is already down, it doesn't take much to push it down. Maybe not, but I think it all plays a part. I definitely believe the Fed lowering the interest rate to what it is now has been very detrimental for the average consumer, but it was made on a corporation agenda, not a personal agenda. I don't like it, we don't get the benefits of a 2% interest rate, thats for sure, but thats how it works.

Originally Posted by Grez

Maybe, but I think its all related. I agree, the fed is the main culprit, but unfortunately they are related. When they happen at the same time, thats when it causes problems. Less supply may equal more demand, but that equals more dollars needed to buy which equals inflation. When the dollar is already down, it doesn't take much to push it down. Maybe not, but I think it all plays a part. I definitely believe the Fed lowering the interest rate to what it is now has been very detrimental for the average consumer, but it was made on a corporation agenda, not a personal agenda. I don't like it, we don't get the benefits of a 2% interest rate, thats for sure, but thats how it works.

The difference is inflation is a general phenomenon. It's an overall lowering of the purchasing power of each dollar in any area. Supply and demand can increase or lower the price of an object regardless of inflation and can be widespread, or very localized.