The dollar is reaching record lows as the economy is looking grimmer every day. Right now the US economy is struggling to catch it’s breath, needing assistance simply to function normally. The Euro is now at an all time high compared to the United States dollar. Oil and gold prices are at an all time high yet demand seems to be at a ten year high. The reason is not because of supply and demand problems, the problem comes from these temporary “band-aids” the federal reserve is imposing on American citizens. Injecting money into the economy, reducing interest rates and bailing out large financial interests on continues to deflate the Us dollar.
What does this mean?
If the us dollar becomes inflated then every single dollar is worth a little bit less, meaning that goods like gas and food become more expensive. This has happened to dozens of economies throughout history and many countries are currently living inside of hyper inflated economies.
- Deflated Currency means:
- Purchase fewer goods for the same amount of money
- Savings are worth less
- Investors lose faith in America, move to foreign economies
- Fewer opportunities for wealth
- Fixed income individuals are unable to pay their bills
- Increased job loss
If the economy continues down this path of destruction hard times are sure to come. No amount of short term fixes will repair the broken back of the economy vis a vis the housing market, credit crunch and in stable currency.