US Dollar Set to Be Destroyed by Inflation of Money Supply.
posted by Josiah Garber on May 20, 2009
in Economics, Politics
The dollar is being destroyed and most people are about to be blindsided. Perhaps many of us do not even understand the implications of the destruction of the dollar.
The destruction of the dollar means that the American consumer, will lose a drastic amount of purchasing power in the coming months or years. For example, if you pay $3 for a box of cereal today then next year, or a couple years from now, it may cost $4 or $10 or $25. Rising prices are caused by shortages of supply, higher demand, or increasing the money supply.
One things we certainly have right now: An increase in the money supply… Remember the bailouts, the injections of liquidity into the markets, deficit spending, and massive loans to large dying corporations? This spells one thing: New Money. These huge items are being and will be financed by inflation (an increase in the supply of money).
Of course dollar devaluation is nothing new. The U.S. Dollar has lost around 95% since 1913: about 100 years ago. A complete dollar destruction looks different. The devaluation is set to accelerate with massive bailouts completed and on the horizon.
What are the implications for a dollar collapse. Those holding dollars or bonds are at serious risk for losing value due to inflation. Other asset classes may increase in dollar amounts (though many not in value). Unfortunately dollar devaluation, otherwise known as inflation, is very destructive to the economy: Many industries will struggle and die.
In a worst case scenario our country will go the way of Germany or Zimbabwe. Inflationary policies are very destructive and always hurt the poor the most, as they have no protection against inflation. In Zimbabwe national currency is practically useless. See Below.
The solution to this problem is to constrain massive increases in the money supply. Support HR1207 to audit the Federal Reserve as a first step.
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