The Falling Dollar --
Get (Your Money) Out of the Way!

My focal point now is the falling dollar as the year 2007 groans to an end in the middle of world-wide financial chaos. Our government, of course, is masking the actual velocity of the dollar’s free fall as best they can, but a few tell-tale signs can tip us off just how fast and how far it has fallen. The government’s dollar index had been hovering around 82 to 80 for most of this year until recently when it has dipped into the high 70s. But that dollar index is another one of the government’s psychology numbers just like the Consumer Price Index (CPI) -- all government numbers are mirages.

One of the tell-tale signs of the free fall of the dollar I saw in an article on the internet in early November. The article stated that the Canadian dollar was now at parity (equal to) the American dollar. Not too much shocks me about how things unfold behind the scenes, but that announcement took me by complete surprise. For almost 40 years the Canadian dollar has been 65 cents to 68 cents on the American dollar, and now it has reached an equal one-to-one status. My first thought was, “Man, the dollar is in a free fall, and now the monkey is out of the bag.” A week later I heard that the Canadian dollar was worth more than the American dollar, and a week after that the Canadian dollar weighed in at 1.09 on the American dollar. The speed of the falling dollar's descent is rather breath taking.

Another thing that is further crippling the already falling dollar has been the Muslim OPEC nations banding together to demand euros from the US when we buy their oil. This process has been going on for almost two years now, and of course, Uncle Sam will never tell us about that. The dollar has already lost its status as the premier world currency and is being replaced with the euro and the yen.

Probably the biggest contributor to the dollar’s speed-of-light descent is the recent sub-prime mortgage meltdown. Basically, four to five years ago, inspired by Wall Street’s money grabbers, a bunch of hard-money lenders and mortgage brokers jumped on the wagon together and started offering no-strings-attached mortgages to people with bad credit. Most of these people also had thousands of dollars of credit card debt that they couldn’t pay. So the brokers and bankers, not requiring any down payment from these people, not only put them into homes that they had no business owning, but they also paid off their bad credit card debt. The final outcome? – Massive foreclosures and bankruptcies. Three to four years later now, at the end of 2007, flocks of chickens are starting to come home to roost, and there in only one perch to sit on.

The banks, savings and loans, and mortgage companies are finding themselves in a pot of boiling oil, and there is no way to escape the pain of the sizzle. All the government and the Federal Reserve can do now is to try to bail out the banks by printing pallets of money and adding zeros to the bank ledgers. But when you do that, it is creating money out of thin air and that is highly hyper-inflationary, adding to the velocity of falling dollar. The problem is unstoppable and unsolvable, and it will bring this country and the dollar to their knees. Only time will tell how long it will take to see our dollar reach ground zero.

Just a few last thoughts about the true purchasing power of today’s dollar as December, 2007, draws to a close and we issue in 2008. According to my unofficial calculations which I have pieced together outside the intentional confusion of our government’s meaningless numbers, I have come up with what I think is a fairly accurate appraisal of the true worth of our dollar today. Based on the 2002 dollar as a dollar of purchasing power, today’s dollar will purchase only 15 to 20 cents on that 2002 dollar. Or in a real simple way, if a person had $100,000 in “the system” in 2002, it is only worth $15,000 to $20,000 today in actual purchasing power today. Rather shocking? It is only the beginning of the total collapse of the dollar. What is ahead of us, unfortunately, will make 1929 and the Weimer Republic look like kindergarten games in comparison.

The only way I know to reverse some of the effects of the falling dollar on you and your loved ones is to buy tangibles, like gold, silver, food, and other basic essentials, things that will appreciate and maintain their value over time. You also need to get out of “the system” as much as possible and sit on the sidelines before the full financial tsunami hits our shores.

Contact us to find out how
to protect yourself against the falling dollar.

Back from the Falling Dollar to the Home Page