DOLLARS

The devaluation of the US dollar is worrisome. Keep the following in mind.


When the value of the dollar goes down in relation to foreign currencies, it is easier for us to export the products we produce but, on the other hand, it costs more to import goods from other countries. We are much more reliant on foreign goods now than we were a few years ago. More and more of the things we buy are made overseas or have parts that are made in foreign countries.


The value of the dollar goes down as our interest rates are reduced. If we have to continue to reduce interest rates to hold off inflation or to mollify mortgage money problems, we are in a pickle. Who do we serve?

Most countries of the world have large amounts of US dollars in their treasuries. They need dollars to buy our products and to buy oil on the world market. As you can imagine, the rest of the world does not want the value of the dollar to be reduced. Oil producers hate it especially.

There is a huge world market for currencies. Some people get rich and some go broke trying to foresee the value of currencies. You want to buy the country's currency that you think will increase in value. The demand for a currency will increase its value as will the perception of the stability of that country's finances.

The US dollar used to be worth almost two Canadian dollars. Today, they have almost the same value.


It may be not too far off that Canada, Mexico and the USA have a common currency, to replace the dollars and peso. God forbid!

The US can print more dollars any time it wants but when it does, the value of the dollar goes down. Congressional spending drives this.

With all these problems with the dollar, keep your eye on the value of gold and silver. Precious metals are always precious. Those with money will surely want to exchange less precious dollars for always precious metal. The hottest commodity on the Bengals will be Chad Johnson's teeth.