Weak Dollar

I’ve heard the phrase “weak dollar” many times in the past but didn’t realize how much it affects my everyday life until recently.

With the Federal Reserve buying up it’s own debt lately with a shuffle shell game that you really have to pay attention to, to see what they are doing; it’s causing our US Dollar to be way less in value than it should be.

Between buying our own debt and printing money like it grows on trees. (Pardon the pun, as paper comes from trees – ah ha ha).  Seriously, the government is risking causing hyper-inflation which is something we really don’t want to have in the United States.

I know you’ve heard how in Germany before the Nazi’s came into power their money was worthless…it would take a wheel barrow full of their money just to buy a bag of bread. It has also happened to another country in our present day, Zimbabwe.

According to the Cato Institute, Zimbabwe is the first country in the 21st century to hyperinflate. Zimbabwe is in the late stages of a classic hyperinflation. … Inflation is galloping ahead as the supply of Zimbabwe dollars surges and the demand for them shrinks. Eventually, the currency will totally collapse as people simply refuse to accept it. In recent months, facts on the ground have validated this prognostication. The Zimbabwe dollar is dead.

Also, per a news item on CNN.com in December 7, 2008, “Cash-strapped Zimbabwe revealed plans Saturday to circulate $200 million notes, just days after introducing a $100 million bill, Finance Minister Samuel Mumbengegwi said.
Zimbabwe central bank governor Gideon Gono shows a new $50 million note Thursday.

After the $100 million note began circulating on Thursday, the price of a loaf of bread soared from 2 million to 35 million Zimbabwean dollars.

Amid allegations of illegal foreign currency trading, the government also fired top executives at four major banks Thursday, according to The Herald, a state-owned newspaper.

Many anxious residents of the nation’s capital, Harare, have been sleeping outside banks, waiting for them to open so they can make withdrawals before the institutions run out of cash.

The Reserve Bank of Zimbabwe had capped maximum daily withdrawals at 500,000 Zimbabwean dollars: about 25 U.S. cents, or about a quarter of Thursday’s price of a loaf of bread.

Last week, restrictions on cash withdrawals — due to severe money shortages — triggered A CNN journalist in Harare contributed to this report.”

How long can our government continue to print money like there is no tomorrow and buy its own debt before we are facing the same situation?

I think the urgency to fix the US economy is a far greater than the need to reform health care, implement Cap and Trade and the million of other things the Obama Administration is concentrating all it’s energies on at the moment.  I say the time for action is now!

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