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Originally Posted by Need_affordable_home
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It's been happening for a long time. The U.S. government used to print a record of the increase to the money supply called the 3M Report. They stopped publishing it over a year ago because it gave economists too easy a view of how the Feds were running the printing presses and throwing out dollars to support their deficit spending.
So far the dollar being the main reserve currency and the main component of foreign reserves, as well as the standard currency of oil transactions has kept it from diving too far, but the truth is that we are hyperinflating our money supply and it will come back to bite. You can't carry an estimated 20+ Trillion debt and pretend your currency is worth anything.
That's why it's a good idea to get out of debt if you can and pay off loans, avoid equity loans, and be frugal with credit card use.
Many people make the connection between housing prices and real dollar inflation. Or, look at what's happened to precious metals and their prices shooting up from approx. $320/ounce for gold in July of 2005 to $657.20 when I just checked on thebulliondesk.com. Is it really just "appreciation"...???? Or.... is the price of gold for instance reflecting the true decline in dollar value since mid 2005?
There's a measurement called the "BigMac Index" which shows how much of a local currency a BigMac costs and the idea behind it is that a BigMac is basically a BigMac wherever and in whichever country it's made. Comparing the cost of a BigMac in China or Japan to one in Germany and/or the USA can give you a current idea of current currency values.
The same with an ounce of gold. Is the increase in dollar value really a "value" increase...or sign of the dollar's loss of value?