The Declining Dollar Erodes Personal Savings
I don`t know whether the dollar is gonna fall to 2 DOLLARS In the future Against the Euro,it has been rising in the last days in a very volatile trading.WHAT IS WORRYING IS THE UNPRECEDENTED SURGE OF OIL TODAY TO 139$(UP 9 DOLLARS).CONCERNING THE EURO,IT ROSE MODESTLY TO 1.58.7$(not its highest level of 1.60.45$).I BLAME SPECULATORS.EXPECT OIL TO RISE TO 200$ AND THE EURO TO 2$.[I HEARD THAT INTEREST RATES ON THE EURO WOULD RISE FURTHER SOON].
I like your article,really impressive!.Honestly,I think The Euro is the Weaker Currency.I remember that I purchased Euros at ONE DOLLAR 60.5$ US CENTS ( April,the 12th)and was greatly astounded at The high Volatility Of Currencies.I lost at The Strength Of the Dollar & weakness of The Euro!.Interest rates on The Euro are expected to rise to 5 or 4.5 percent,next month,perhaps The weak Euro currency would recover its value at 1.61$.
The dollar is likely to fall to 1 dollar 65$ or even 1.70$ next month As Interest rates on the Euro Could rise above 4 % next month and coinciding with The unprecedented Surge of Oil and Bad news about The U.S Economy.For example,Unemployment rose from 5 to 5.5% in the figures released today.It`s worth mentioning that the dollar is now stronger to the level it reached back on april 13th ,when it reached 1.60.35$ to the Euro.Thanks for this great Article!
The Declining Dollar Erodes Personal Savings
by Ron Paul
http://www.lewrockwell.com/paul/paul324.html
A recent article in BusinessWeek magazine by James Mehring paints a stark picture of the ongoing decline of the U.S. dollar. The dollar has lost 5% against a blend of worldwide currencies just since April, falling to a 12-month low against the Euro and an 8-month low against the Japanese yen. Overall, the dollar fell 28% against other currencies between 2002 and 2004. It then rebounded slightly, but even the cheerleaders in the American financial press cannot shrug off this latest decline.
Of course the real measure of just how far the dollar has fallen can be found in the price of gold, which has reached a 25-year high of more than $700 per ounce. It’s much more accurate to measure the dollar against a stable store of value like gold, rather than against other fiat currencies. Gold has nearly tripled against the dollar since 2001, when the price was $250 per ounce. By this measure the dollar is losing value at an alarming rate.
Remember, gold is static. Gold isn’t going up, the dollar is going down. And it’s going to continue until the American people demand an end to deficit spending by Congress and unrestrained creation of new dollars by the Federal Reserve and Treasury department.
A sharply rising gold price is really a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
As Mr. Mehring suggests, the Federal Reserve may have no choice but to raise interest rates to maintain foreign enthusiasm for our dollar. It’s a serious problem that new Fed Chair Benjamin Bernanke must address sooner or later: propping up the dollar with higher interest rates without killing the U.S. economy in the process.
The world financial markets are betting against the dollar and against Mr. Bernanke’s chances of correcting the imbalances caused by Alan Greenspan. Our creditors, particularly Asian central banks, are losing their appetite for U.S. Treasuries. Our federal government’s huge debt and voracious appetite for deficit spending make our economy dependent on the actions of foreign governments and central bankers. Yet few Americans realize the extent to which their own government has sold out American sovereignty by borrowing money overseas.
The consequences of a rapidly declining dollar are not yet fully understood by the American public. The long-term significance has not sunk in, but when it does there will be political hell to pay in Washington. Our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. The artificial stimulation of our economy through cheap money comes with a price. When dollars are abundant, they are worth less. This is the reality facing Americans today, especially older Americans who rely on savings to finance their retirement years.
May 16, 2006
Dr. Ron Paul is a Republican member of Congress from Texas