Good Buy Dollar?
No, I didn't misspell "bye" in the title. I've talked about how the US dollar is in real trouble and now, it seems to be under attack from China, the Arabs, Russia, and a few others. Even France is in on this cabal of countries plotting against the US dollar. French payback for earlier snubs from Obama? Only the French know. Apparently, wine and cheese along with oil is traded in the US dollar? Oddly enough, all three we can get here at home, but that's another issue. For now, we're concerned about our dollar. The sad part is China refuses to devalue the yuan and artificially prop up the value up to 30% than it should be. They keep their currency high because they don't let it "float on the open market" and because they know they will lose much of their textile businesses to Laos, Vietnam, and Thailand.
We know that the dollar is very weak. Great for exports, but bad for imports. Since we like to import more than we export, this situation cannot be helpful to our trade deficit or our bottom lines. Add what our Federal Reserve and Treasury have done our monetary policy, it's no surprise that the dollar is weak.
The countries pushing for an international currency will push England into the euro, and we will go kicking in screaming into a new world currency because the Chinese will say we have to. China owns 80% of our debt and we also know that if they stop buying our debt, our economy will completely collapse as the credit market dries up. They have us. I can see the US trying to combine currencies with Canada and Mexico in order to combat the increased power of the euro if England joins and a world currency happens. In reality, China will be dictating whether we can do a North American currency or not. Most likely, the US dollar is toast.
What started under the last few months of George W. Bush but continued ahead full steam under Obama has created a situation that has now threatened our economic security and economic freedom in the world. It might not be too late to do something. However, it will mean that Obama will have to do a 180, and head with all due diligence toward Reagan ideas of small government and cutting taxes. Small government will allow the government to control its spending, thereby controlling the amount borrowed from others. Cutting taxes will generate momentum for business to expand, and the economy to grow. As a result, more money will flow into the federal government - like it has every time taxes have been cut - which will allow us to begin to balance the budget and begin the long road of paying off our foreign owned debt. This also means scraping any new expensive entitlement programs that Congress is currently discussing. Use the market to heal the market. All seems to ride on whether we can strengthen the dollar.
We know that the dollar is very weak. Great for exports, but bad for imports. Since we like to import more than we export, this situation cannot be helpful to our trade deficit or our bottom lines. Add what our Federal Reserve and Treasury have done our monetary policy, it's no surprise that the dollar is weak.
The countries pushing for an international currency will push England into the euro, and we will go kicking in screaming into a new world currency because the Chinese will say we have to. China owns 80% of our debt and we also know that if they stop buying our debt, our economy will completely collapse as the credit market dries up. They have us. I can see the US trying to combine currencies with Canada and Mexico in order to combat the increased power of the euro if England joins and a world currency happens. In reality, China will be dictating whether we can do a North American currency or not. Most likely, the US dollar is toast.
What started under the last few months of George W. Bush but continued ahead full steam under Obama has created a situation that has now threatened our economic security and economic freedom in the world. It might not be too late to do something. However, it will mean that Obama will have to do a 180, and head with all due diligence toward Reagan ideas of small government and cutting taxes. Small government will allow the government to control its spending, thereby controlling the amount borrowed from others. Cutting taxes will generate momentum for business to expand, and the economy to grow. As a result, more money will flow into the federal government - like it has every time taxes have been cut - which will allow us to begin to balance the budget and begin the long road of paying off our foreign owned debt. This also means scraping any new expensive entitlement programs that Congress is currently discussing. Use the market to heal the market. All seems to ride on whether we can strengthen the dollar.
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