Monday, April 21, 2008

The falling value of the US Dollar.

Everyone is probably already aware by now that food prices are climbing. Gas prices have been on the rise for some time now. Never again will we pay less than a dollar for a gallon of gasoline. I have seen it pointed out, and was able to verify that the rising prices of gasoline directly coincides with the declining value of the dollar. If you do the math, the value of gasoline has not risen in nearly fifty years. In fact, so consistent is the value of crude oil that it can reliably be used to gauge the value of the dollar on the international market.

The reason this happens is actually really simple to understand once you know what's going on. There are several things that affect the value of a currency; namely the strength of the economy, and the amount of the currency in circulation per capita. In layman's terms, the more money you have in circulation per citizen, the more plentiful the currency becomes, and the less value it has.

Fortunately for us, the United States is a fairly big place with a descent sized population; so you would have to increase the amount of money in circulation several orders of magnitude for the world to even notice a difference. And yet, gas prices are still rising, and food prices are rising. Surely the feds are aware of this, so why are they printing more money? What single drain on our tax dollars do we have that is so monumental that such a vast amount of new currency must be printed in order to support it? I won't answer that question because I'm not entirely interested in starting a debate on the Iraq war.

But there is more happening here than just too much excess money being printed. This is happening at the same time as the housing crash, which means the economy took a major dip. Think about that for a second, the economy took a dip at the same time as money is becoming more plentiful- both are known factors that contribute to the devaluation of a given currency.

Your next question is probably the obvious, "Well, if money is becoming more plentiful, where's my share?"

I said more was being printed, I didn't say it was finding its way into the hands of regular citizens. Remember what the big drain on our financial resources is? That money is going into the hands of arms dealers and other corporations that benefit from war.

If the economy goes to pot, all that money flowing into our corporate overlords' pockets will become useless. Obviously, Washington must be scrambling to come up with a solution. Ending the war in Iraq is not an option because the Bush Administration is not done furthering their corporate agenda. Ceasing the printing of new currency is not an option because their lobbyists do not feel they have sufficient padding for their back pockets- and besides, how are they going to pay the "stimulus" checks?

No, clearly the best solution would be to replace our existing currency with one that can increase in value amid being made more and more plentiful. A currency that is universally trusted. A currency that has a record of remaining strong on the international market, and can pay for both the expensive war crimes in the middle east and solve our domestic economic problems back home.

I propose that we adopt Google stock certificates as our new form of money.


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