Death of the Dollar
The value of our dollar is falling, because our nation has been living beyond its means, and we’re borrowing $2 billion a day from foreign lenders in order to maintain our standard of living.
The death of our dollar is the result of the $5 trillion in trade deficits America has run up, since the passage of NAFTA and the creation of the World Trade Organization. In 2006, our trade deficit reached $764 billion, such deficits are unsustainable and have led to a decline in the value of our dollar.
As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they’ll demand more dollars for those goods. This will mean rising prices for the imports on which America has become increasingly dependent.
China is willing to take losses in the value of the dollars that it holds, to keep the our technology, factories and jobs pouring in, as their exports capture America’s markets from American producers.
The Japanese will take some loss in the value of their dollar hoard to take down Chrysler, Ford and GM, and capture our auto market as they captured our TV, camera and computer chip markets.
Other nations that have kept cash reserves in U.S. Treasury bonds are watching the value of their assets sink. Consequently, they have begun to divest and diversify, taking in fewer dollars and more euros and yen. As more nations abandon the dollar, its value will continue to decline.
The oil-producing and exporting nations, like China, with trade surpluses have begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in our investment banks and companies.
The death of our dollar is the result of the $5 trillion in trade deficits America has run up, since the passage of NAFTA and the creation of the World Trade Organization. In 2006, our trade deficit reached $764 billion, such deficits are unsustainable and have led to a decline in the value of our dollar.
As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they’ll demand more dollars for those goods. This will mean rising prices for the imports on which America has become increasingly dependent.
China is willing to take losses in the value of the dollars that it holds, to keep the our technology, factories and jobs pouring in, as their exports capture America’s markets from American producers.
The Japanese will take some loss in the value of their dollar hoard to take down Chrysler, Ford and GM, and capture our auto market as they captured our TV, camera and computer chip markets.
Other nations that have kept cash reserves in U.S. Treasury bonds are watching the value of their assets sink. Consequently, they have begun to divest and diversify, taking in fewer dollars and more euros and yen. As more nations abandon the dollar, its value will continue to decline.
The oil-producing and exporting nations, like China, with trade surpluses have begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in our investment banks and companies.
posted by Jim O'Leary | 12:06 AM
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