More Bad Tidings for the Dollar

Paul Craig Roberts has another interesting article out about the problems facing the US Dollar in 2007 and beyond. As a former Assistant Secretary of the Treasury under Reagan, he has the experience and expertise to match his incisive writing.

Roberts brings up a very interesting point: A weaker dollar is supposed to be better for US exports according to economists and other pundits. With much of our manufacturing base already offshored, what exactly are we exporting?

Many journalists and economists warn about how America’s negative savings rate is bad for the country. Considering the paltry returns on money in savings accounts and smaller money market funds when compared to both the advertised and real rates of inflation, what benefit is there in saving? The effects of inflation will more than cancel any returns from interest.   Like the current Visa ad states, we (i.e. the USA) need faster money.   Money languishing in savings accounts is slow, while money we spend over and over and over again keeps the whole economic/financial system humming along.   If enough of us don’t continue to do that, we’ll be in for some rough sledding sooner than we’d like.    The ride will end soon enough; in the meantime, I’m purchasing durable goods for sustainable living while my money still has some worth.

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