Political Whispers: A Look Into Today's World of Dark Politics

THE DEFLATING DOLLAR VS. FED STUPIDITY

By Schuyler Thorpe
Author and Political Activist

The Fed is set to lower interest rates once again--which will more than likely drive stocks up on this. But sadly, the Fed is just trying to bail out investors, lenders, and borrowers from their own mess.

It's not going to do the economy any good when the government and the Fed are on the side of big money. These people who have been ensnared in these ARMs loans are just going to lose their homes anyway.

They can't afford the increased payments, and they certainly can't afford to keep their homes either.

One analyst said that Bush's mortgage bailout plan was essentially worthless--because it wouldn't stop what's happening with the housing meltdown anyways.

Just extends it.

Regardless of what the Wall Streeters says, this is going to have an adverse impact on our economy. Sending it into recession.

Lowering interest rates are just going to drop the dollar into the toilet further, forcing oil prices back above $90 and...well, start this whole mess over again. (Seeing how artificially low interest rates was the main culprit to this problem to begin with.)

The Fed already lowered rates twice already--thinking that was going to help--but once things snowballed, Bernanke jumped the gun and decided that a third rate cut is going to fix things.

It's not.

It's going to make things much worse.

He says he's worried about inflation, and the idiot doesn't understand is that the inflation he's referring to is core-index numbers. What he doesn't see is the inflation which has struck all of America in terms of the high costs of living and food!

Basic essentials are just going through the roof on price because the dollar has lost much of its value! It's putting a serious hurt on the average consumer.

And if you believe that things are hunkey-dorey in your neck of the woods, try taking a small amount of money--let's say $100--and go shopping for food.

Here's a list of things that I want you to get:

1 plastic bottle of ketchup (24 oz)
1 jar of kosher baby dills (24 oz)
1 jar of green Olives (10 oz)
1 bag of chicken breast tenders (they're like chicken nuggets)
2 bags of mini pretzels
1 jar of mayo (30 oz)
2 bags of mixed vegetables with cheese sauce included
1 bag of corn chips
2 bags of chili cheese corn chips
1 box of taquitas
2 cans of pear halves
2 cans of peaches (sliced)
1 container of cottage cheese

Ready for the end result?

My bill came to $40.27 after these purchases.

You would be left with $59.73.

Think this is normal? Wrong!

This is what the depleted power of the dollar would get you.

Under normal circumstances, this list would only cost you $10 less if the dollar was strong.But because of the weak dollar, you are now having to spend $10-$20 more in basic essentials--just to make up the difference. And for each interest rate cut the Fed dumps on the market, you take another $2-$5 hit on your next purchase.

Because why?

The dollar is being weakened by interest rates--making it less attractive to foreign investors and buyers. If you haven't figured it out by now, our major buyers of the dollar have been supplementing their currency reserves with other monetary denominators (like the euro). The Chinese have been. The Japanese are about to, and last I checked, Iran has dumped the dollar as a major trader in its oil market; supplementing it with another more stronger currency.

So as a result, it is now costing you and me more money to buy things.

But why hasn't the government or the Fed acted on this information to boost the strength of the dollar? To keep it from collapsing?

Because they don't care. It's not important to them--seeing how our national debt is being financed mostly by the Chinese and partly by the Japanese.

All they want is to keep the economy going for Wall Street and big business--no matter what the cost it is to average American consumer! We are being sacrificed for Corporate America here, people!

Wake up!

But the sad part to this latter half of the story is this: We haven't begun to pay off the interest to our staggering debt yet. And when we do in the coming years, it's going to take three times the amount of money to pay off the first loan of interest.

So let's say that you've just financed a car and your first payment is $450--using the above scenario.

Under your terms of contract with the dealership and your starting interest rates of 3.9%; you would be paying an additional $175.50 to that normal amount each month. But if the dollar continues to weaken further and further still, the amount of interest you would have to pay instead would eventually be $526.50--on top of that $450 a month.

Given what the Chinese are going to charge us for interest rates on a $9.3T debt...? It's not going to be pretty when the time comes to pay the Piper's first bill.

Not good at all.

Schuyler Thorpe is an author, a political activist, and a frequent letter writer to The Everett Herald of Snohomish County. He can be reached at: starchildalpha1 at yahoo.com

Labels: consumer spending, cost of living, Federal Reserve Bank, groceries, housing market, inflation, purchasing power, recession, US dollar, weak

posted by Schuyler Thorpe @ 3:12 PM