Hey Bro, You Got A Dollar? What Happened To "A Dime?"

Hey Bro, You Got a Dollar? What Happened To A Dime?


October 14, 2009
By Keith Brock, CLU, ChFC, LUTCF
www.can-you-hear-us-now.blogspot.com

Can you remember the saying: “Hey brother, do you have a dime?” A dime wouldn’t go far today, probably about as far as today’s dollar in yesterday’s currency. In other word, in the 30’s a dime was worth a lot more than a dime today. When money decreases over time in its value the term we use to describe this phenomenon is: “Inflation”.

Inflation strikes fear into the heart's of those who are on a fixed income, and for good reason. Many a person thought they had done everything right in life: went to school, got a good education, worked hard, raised their family, saved in a retirement plan for the future, but ended up broke. How could that be? It depends on what they invested their money in and how well they watched it.

For safety, and many people are very concerned that their money will be there when they retire, a fixed investment is often purchased. One such investment is debt in the United States Government. We call this Treasury Certificates, Notes and Bonds. Notes are normally five or ten years, whereas Bonds are typically 30 years and certificate are only for a term of 13 or 26 weeks, etc. My point is that each type typically stakes out a different period of time.

Let's look at an example: You invest today $10,000 in a U.S. 30 Year Treasury Bond at a certain percent. It is locked in. Let’s say the interest rate is 5% for illustrative purposes. You are feeling good! Your money is safe, you have a great interest rate locked in and…and things starting happening.

1. We are informed that the interest rates must go up, like soon, to support the dollar because foreign countries and individuals can take their money and invest it in Asia and get a better return. Why would they leave it in America, especially when the interest rate is near zero percent? Because it is safe. We have the biggest and baddest military force in the world and their money is safe, here. Foreign rulers can rest easy at night – or can they?

a. Lately they have been losing sleep because the US Treasury printed 104,000,000 miles of dollar bills. That’s the equivalent of 2 trillion dollars. Worse, the United States Government treated it just like real money – which it is – and spent it!

b. All this money going out into the market caused the dollar bill to decrease in value big time. Even before this event, earlier this year, the US Dollar has decreased between 30 and 40 percent in the last ten years, but 10 percent in the past 36 months. It could actually be even worse, depending on whom you read.

Foreign Governments are not very happy that we are driving down the value of our dollar because they give us 100 cents, and three years later, after interest income, they get back a dollar worth 75 or 80 cents. Does that sound like a good deal to you? Not me. No wonder the Chinese has stopped purchasing U.S. Debt between January and June of this year. It was so bad that the Secretary of Treasury had to go hat in hand to China and beg them to keep purchasing our debt – its still safe and good, he promised. Their students in a University laughed at him and the government leaders lectured him about being a better capitalist. “Ouch” that hurts, huh?

Now what’s in this for the U.S. Government and the American people? Plenty! Who wouldn’t want to take in 100 cent dollars and pay back with 75 cent dollars? That is a very cheap loan. Also, the American consumer can continue to purchase cheap Chinese products even cheaper. However, there is the affect on our manufacturing base, which has been decimated – jobs are lost that are NEVER coming back, America.

Now for the rub: Ben Bernanke is between a rock and a hard place. You see, the world is dumping dollars. They don’t want them. The reasons above should explain it. They want money that will be worth at least the 100 cents they put into, and if things go really well, they can actually sell it for more than they paid for it. George Sorros became a rich man betting against the English Pound, for example, so there is plenty of money for the lucky to be made on currency exchanges. However, the concern in the United States is that the world will follow what Iran and Venezuela’s presidents have been calling for dumping the dollar for a new or different world currency. We don’t even want to think what would happen to your wealth and value if that happened. We also don’t want the status of a beggar country in the world where the value of the dollar is dependent on a whole new range of criteria. Surprisingly, our New Treasury Secretary said earlier this year that he could visualize another currency taking over the place of the dollar in the world and didn’t seem concerned. Since then, I think he has walked back from that earlier statement.

Ben Bernanke, in order to keep the American dollar stable must raise interest rates to up near 10% because there is no value in holding it otherwise – especially if the American government is spending like the printing presses will never be turned off. But to do that, it will kill the growth this economy needs to get you and me back to work, or keep us in work. Worse yet, there is a certain number of new people coming into the job market every month, and it is a very large number, that must have jobs because our population is still growing,  just to keep the jobless rate even.

If you haven’t noticed, we are under stresses not only at home as a popular president crams his idea of America down the throats of America, even though he knows that the majority doesn’t want it. It doesn’t matter because he is not doing this for the majority. He figures the majority got theirs, and now it is the minorities turn. Let’s be perfectly clear what is going on. It is called the Obama-transfer-of-wealth agenda.

Worse yet, Europe is lining America up to have pressure put on us by Africa for the next stage of wealth transfer. This is a world transfer and it is going to be massive in the future.

Europe is instructing African leader’s that the iron is hot for striking out at America; this is the time to get some real money from her. They are poised to make their demands at the upcoming climate change conference, which has nothing to do with climate and everything to do with shaking down the U.S. Evidently, Europe believes they have their Europeanized team in the White House and on Capitol Hill, now, and the time is right to get us to sign away our rights on the dotted line. This will tie our pocket books open for pillage for years, if not decades, to come; until the American people rise up and throw the shackles the world is trying to put on her that they couldn’t do with military might. I’m not ready to give up my freedom, my liberty nor the right for the purist of happiness – the very things that seem to be the price of this fundamental change President Obama promised would happen to America five days before taking office. He warned us. We didn’t understand. Now we do.