Are You Worried About the Collapse of the US Dollar?

  1/20/09 (currency
vs. the value
of the USD)
9/14/12 (currency
vs.the value
of the USD)
 Difference  Gain or Loss
 Swiss Franc 1.14 0.93 -$0.21 18.54%
 Chinese Won 1.36 1.13 -$0.23 17.07%
 Canadian Dollar  1.26 0.97 -$0.29 22.97%
 British Pound 0.93 0.81 -$0.12 13.14%
 Euro 1.29 1.31 $0.02 -1.43%
 Russian Ruble 42.21 40.54 -$1.67 3.96%

The above table reflects the change in currencies against the US dollar since Obama took office on January 20, 2009. The NYSE on that date was 8,279. The market closed today at 13,553. That reflects an increase 63.7% since Obama took over. Of course the market had already crashed: the economic collapse was kicking off with TARP and the market’s reaction to an Obama victory. So the stock market is actually about where it was when the mortgage and credit crisis became public knowledge at the close of Summer, 2008:

The American public is now suffering the inflationary policies of the Federal Reserve and a failed energy policy throughout all aspects of our life but mainly gas and food. But let’s look at some basic facts:

1. According to the Federal Reserve, half of the value of the stock market is due to the actions of the Federal Reserve. In other words, at some point, the true value of the stock market will be corrected by 50%. Long term investors have lost 2.71% in the past five years (not accounting for inflation) instead of the 63.7% gain listed above.

2. Most people value the US dollar against the value of the Euro. If you had converted your USDs to Euros when Obama was inaugurated, you would be down 1.43% (not accounting for inflation). If you would have invested in the Canadian dollar, you would have gained 23% in this time frame. The US dollar, Euro and to some extent, the British pound are all currencies that are in danger of complete collapse. Valuing one of these currencies against the other makes no difference as they all decline. The value of the dollar vs. the average appreciation against the Canadian dollar, Swiss franc and Chinese won since January 20, 2009  has decreased 20%.

3. Silver is up 206%  and gold is up 107% since Obama was inaugurated.

4. The Euro is up 6.46% in the past thirty days due to both Europe and the Fed cranking up the fiat currency print presses.

5. No need to discuss the price of ammunition and firearms in this period.

As the US dollar is devalued by the Federal Reserve and an impotent Congress, our life’s savings are being stolen. The American dream of working an entire lifetime and saving the fruits of your labor has resulted in a loss of 20% under the Obama administration. The stagnation of the NYSE is an artifact of the Federal Reserve’s creative policies. In the end, the dollar will continue to decline, the stock market will drop to its real value and commodities will increase. Especially gas, food and precious metals.

Do not make financial decisions based on the value of the dollar compared to the Euro; make your decisions based on survival and history.

David DeGerolamo

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9 years ago

I am not worried anymore, when the people vote back in either Obama or Romney, they both say they will do more bailouts and will not follow the constitution on most anything, so why worry?