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SENTRY JOURNAL » Currency, Hyperinflation, Monetary Policies, Weak Dollar, Weimar Republic » The Incredible Shrinking Dollar! ( Coming to retailers soon.)

The Incredible Shrinking Dollar! ( Coming to retailers soon.)

Well I survived “Black Friday” and the race to snatch up those bargain basement door buster sales.  “Black Friday” is the day after Thanksgiving and is considered one of the biggest shopping days of the year.  Retailers pull out all the stops to lure you into their stores.  For the consumer it is actually a good thing.  Laptop computers can be found selling for under $300 dollars, while comforters that usually sell for $100 dollars can be purchased for only $20 dollars if you get to the store between the time it opens until some set end time.  The competition is fierce as each retailer tries to beat the price of their competitor.  It is pure capitalism in all its glory.  Actually my wife and I decided to sleep in this year and head out after the crowds died down.  That’s right no waking up at 3:00 am in the morning to get to store and wait for the doors to bust open at 5:00 am.  Nope, we both decided to hit the snooze and enjoy a few good hours of sleep.  When we finally pulled it together and headed out the fervor of the day had already passed. But there were still plenty of sales to be had and my wife and I selectively found our bargains.  However this year I did notice something different.  My purchasing power seemed somewhat diminished.
I mean I felt like my dollar wasn’t quite as strong as in previous years.  Then it hit me.  The reason it felt like my purchasing power has diminished is because it has.  I suspect many of you have this same feeling.  Grocery store prices are a bit higher.  Gas is slowly on the rise.  A dollar doesn’t seem to stretch as far as it used to.  What could be driving this?  Should we be concerned?  The best explanation that I have found as to why the purchasing power of our dollar is slipping was explained on the Glenn Beck show below.

As you can see by the above video the government is monetizing our debt.  This has a direct impact on the value of our dollar and this is why the dollar’s purchasing power is decreasing.  The government is printing money at a record pace and borrowing from itself.  The more money out in the public in circulation the less value it holds.  That feeling you have in your gut that the price of goods seem to be increasing will soon feel like a kick in the gut when hyperinflation hit us.  And it will if we keep printing and borrowing from ourselves like there is no tomorrow.  Please don’t mistake this for just another “the sky is falling” post.  The fact is there is a snapshot in time when this actually did happen.  It was in the 1920s in Germany under the Weimar Republic .

Prior to 1914 German currency was backed by gold.  In 1914 Germany decided to abandon the backing of its currency by gold.  There were a variety of explanations as to why the German government decided to crank up their currency printing presses in the early 1920s.  They ranged from paying reparations to the Allied Powers to maintaining the lavish lifestyles of the rich.  There was also an economic philosophy that embraced the concept that a weak Mark would lead to cheaper export goods from Germany.  Regardless of all the reasons or explanations the German economy spiraled out of control because the value of the Mark became worthless.  It was one of the worst case examples of a nation’s abuse of monetary and fiscal policy and today is viewed as a model for unacceptable monetary policy.  And it all started by abandoning the gold standard.

This is the same path the United States chose in 1971 when Nixon decided to abandon the gold standard as a backing to our currency.  This meant the United States had to police the United States when printing its currency.  And this is exactly the promise we made to the rest of the world when we abandoned the gold standard.  So here we are only 38 years later and look how we’re doing with policing ourselves.  We now have out of control spending, deficit busting legislation, program after program to help the down trodden, and are rapidly becoming a welfare state.

So how can we be so careless in our actions?  I mean why do we refuse to see that the path we are on is leading to the second coming of the Weimar Republic?  Maybe it’s arrogance.  Maybe we believe that the United States is just too big to fail.  I sometimes wonder if Rome felt the same thing, even up to the point where it was ransacked and burned.  The one thing I do know is we need to change our course immediately.  We need to contact our elected officials and tell them not bankrupt our great nation and create additional unwanted welfare programs.  We need to tell them that our Constitution will be enforced from this day forward and their overreaching acts will be challenged on every front.  And we need to remind them once again just who they work for.  They work for you and me.

I believe in the American people, and I know that through all the good and the bad we are still the “Greatest Show on Earth.”  But if we choose to ignore the lessons from the past, I fear we are doomed to repeat them.  Call, write, or email your elected officials now and let them know it’s time to stop the wasteful spending and embrace monetary policies that will strengthen our dollar.


Filed under: Currency, Hyperinflation, Monetary Policies, Weak Dollar, Weimar Republic

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  • acoustproj17 November 28, 2009 at 10:50 AM


  • cowboy4Christ November 28, 2009 at 9:41 PM

    If you want to see what will happen to America in the future, you only need to look to other great nations in history, ie Rome. A great friend of mine once said, "I'm not a psychic but I can tell the future." That being said, I can only pray WE as a people wake up, stand up and take responsibility as Americans not to allow this to happen to us. The wheel is already turning, but it's not too late to stop. GREAT ARTICLE!!

  • John Carey November 29, 2009 at 11:06 AM

    I feel the best thing we can do is take our issues with this out of control spending to the state level. The states have the Constitutional authority and power to shrink the size of the Federal Government. We all need to become acquainted with who our local state legislator is and starting turning up the heat.

  • Anonymous December 1, 2009 at 10:27 PM

    What is your comment on Bush's government spending and expansion? Bush grew government more than any other President. I was part of HLS and we spent and spent to monitor a lot of average joe's msgt…

  • John Carey December 1, 2009 at 11:00 PM

    I know this is probably not the answer you want to hear, but I cannot place the blame on George Bush exclusively. You see he was only one part of the three headed snake in Washington. And both the Senate and House are just as responsible or maybe even more responsible than Bush for the massive expansion of government. Government expansion and the budget go hand-in-hand and as we all know the Executive branch of government can only make proposals based on projected funding for the fiscal year. The meat of the budget is hammered out in the House and Senate budget committees. Nothing gets passed without their stamp of approval. Both political parties are guilty of massive government expansion based on the budgets they have proposed and passed. It’s not a single persons fault or even an administration. It’s a belief all the way around, by both parties that the answer to our problems is bigger government and all are at fault.

  • Anonymous December 2, 2009 at 9:02 AM

    He was the only president that lowered taxes during war. I agree that there is blame on both sides but his job was to go in and reduce the size and spending of government but he didn't do it. He attacked the wrong country and while you were sipping coffee in the great white north my son did 3 tours in the sand.

  • John Carey December 2, 2009 at 7:36 PM

    I honor your son's service as I honor the service of all vets and I agree with you that he did not take a stand against big spending and bug government. All I am saying is that he cannot be blamed solely for the expansion of government during his watch. There is plenty to go around. Both parties have failed us miserably and I like many conservatives felt a bit betrayed when a so called "conservative" President contributed to deficit busting budgets and big spending. He did not get a free pass from me. Just like the 111th Congress and the current President is not going to get a free pass.