Monday, January 9, 2023

He's telling it like it is


Ron Paul hits the fiscal nail squarely on the head in his latest column.  It's important for all of us to understand what he's telling us, because it's true, and it's going to affect all of us when this house of cards collapses.

A strong currency is one that can buy more goods and services than other currencies. That’s not the case with the U.S. dollar.

In fact, the U.S. dollar is only “strong” in comparison to other currencies.

Take the euro for example. Adjusted for inflation, the euro has lost about 35% of its purchasing power since its introduction in 1999.

The yen? It’s down 23% against the dollar this year alone.

Take a look at the three other major global currencies compared to the U.S. dollar and it’s plain as day, they’re not doing well…

As we’ve seen, the U.S. dollar has lost the vast majority of its purchasing power since the Federal Reserve was established in 1913.

So the U.S. dollar is strong in comparison to other currencies… but only because their purchasing power is falling faster than the U.S. dollar’s.

What’s really happening

The central banks of the world are engaged in a race to the bottom. They’re all printing money at an unprecedented rate, and the effects are being felt everywhere. It’s no coincidence that the worldwide inflation rate is “near double digits,” as Bloomberg recently reported (8.8% globally, according to the IMF – ranging from 2% – 210%).

Money-printing destroys the purchasing power of all the currencies involved, including the U.S. dollar.

The only way to restore the purchasing power of the U.S. dollar is to stop the money printing. The only way to do that is to end the Federal Reserve and return to a monetary system based on sound money ... We must do this before the central banks of the world print every currency in existence into total collapse. Look at those charts again. We’re much, much closer to total collapse than we are to stability. And if all your savings are tied up in U.S. dollars, I strongly recommend examining the benefits of diversification.

Because the slowest loser is still a loser.

There's more at the link.

Remember what we said about the US rate of inflation last week?  In that article, I cited Armstrong Economics' estimate that inflation - the real rate of inflation, not the bureaucratically finagled figures issued by the government - amounted to 32% last year.  The weakness of the dollar had a lot to do with that, because other countries demanded more of our (weaker) dollars in payment for what they were selling to us.  That's not about to change.

Think of it like this.  Let's say put $100 in your safe on January 1st, 2022, and took it out again on January 1st, 2023.  On the latter date, it represented purchasing power equivalent to only about two-thirds of what you could have bought with it when you put it away.  Effectively, unless your income grew by a similar proportion last year, you lost a great deal of purchasing power in 2022.  I know I did - I can see the results in my shopping cart each week!

Will this year be any improvement?  I doubt it.

Makes you think, doesn't it?



boron said...

I'd like to see a comparison (and commentaries) to the Russian ruble, the one Putin recently backed with gold.

Old NFO said...

Good points all. Thanks!

Paul M said...

TPTB know from multiple times in history that printing money is the exact opposite path to take but they do it anyway. Why might that be?

In Biden and His Handler's world equity is across all nations, bringing everyone down to a sub-Peon level.

Maniac said...

The man who helped restore my faith in America after the neocon traitors of the W. Administration lifted a leg on her. Wish he would've been President.