Debt is soaring and that is the problem. It would be different if that spending was going into a savings and retirement account or in the case of business, into factory machinery. But it is not. The GDP growth involves spending money and borrowing the money rather than using earnings. That’s where the problem lies. And that’s where the demise of the dollar is going to occur. At some point in the near future, our country is simply going to run out of credit. It is the debt itself, out of control and getting worse that is going to cause the loss of Dollar’s spending power. The higher our consumer debt and our Govt. debt, the weaker the Dollar becomes.
Our economy is fast becoming morbidly obese and we have long abandoned the desire to slim down. We just keep buying bigger and bigger expectations.
We just live in bubble. The loss of sound money -----money backed by tangible asset, rather than a Govt. process--------is the root imbalance that’s plaguing the Dollar.
We have gone through a strange period where several conditions were combined: Record low interest rates, an exploding budget deficit, record high consumer debt, and the housing and mortgage refinancing bubble, Americas slowest economic recovery even after recession and import is far more than export----- the trade deficit-----is a huge problem that will ultimately destroy the US Dollar and its spending power.
