As I often do, I was checking out gold and silver prices and the general strength of the US dollar when I discovered something that shocked me. The Canadian dollar has surpassed the value of the US dollar for the first time, that I am aware of, in over 30 years. (Update: Since November 25th, 1976) Right now, a single US dollar is worth about 98 cents Canadian. Every Canadian can start doing the happy dance – they can actually come to the US and have better purchasing power than they do at home.
This is a perfect example that shows the declining US economy and reveals the direct result of inflation. You absolutely need to know about this because this means that anything holding value in US dollars, such as your stocks, bonds and savings accounts, are actually LOSING value a lot more rapidly than you might think. This also means that your savings will be able to purchase less as time goes on…stay tuned and I’ll show you how you can stop this.
Historical currency charts for at least the last ten years show this is indeed a rare moment and that the value of US currency, when compared to the Canadian dollar, has fallen by over 50 percent in the last 10 years. Take note of the slight dip shortly after 9/11, a short burst upward and then a rapid decline thereafter.
If we look at just the last five years, roughly the time frame that we’ve been creating tons of new money to fight the Iraq war, we see a steady decline of the US dollar’s value. Think they’re intertwined? You betcha. This is the direct result of inflation, which is what happens when we create new money with nothing of value to back it. Take note of the downward trend, since October of 2002, from $1.60 per US dollar all the way to actually being less valuable than the Canadian dollar. That’s a 60% loss of value!!!
Just to bring this rapid decline into the “how quickly it’s happening” perspective, I’ll show you just the last year. We see about a 15 percent drop in value just since October of last year. If this trend continues, we’ll be in some dire straits in no-time.
And just in case that’s not enough for you, you can see that over the last 30 days, we’ve declined another six percent. Six percent in 30 days???? Ouch…that kind of hurts. Well, maybe not me…but I feel the pain of all you believers out there that have their life savings dumped into the US dollar. Boy, am I glad that I never reconverted my Canadian money back to US dollars from my last trip. I’ve made almost a buck because of this!
Pretty depressing, huh? I think so. I remember the days when I could go to Canada and get some fantastic deals because the US dollar was so much stronger than the Canadian dollar. Those days have been dwindling to an end…and the end is now here.
If this isn’t your wakeup call to get out of the US dollar, I don’t know what will be. If you think all your stocks, bonds and savings accounts are making you money – you better think again. You’re losing to the inflation tax. Trends for the stock & housing markets look just as dismal as of late – yes, the US economy is crashing. If things keep going this way, there’s going to be a lot of sad people out there.
I’m not too worried myself, and for all I care, the trend can continue. You see, over the past several years, I have been transitioning over 90% of my savings into real money. What is real money, you ask? It’s the lore of yesteryear…gold and silver. Ayyyyyyyyeeee mateeee! And I’m not talking about paper silver & gold, as in the stuff traded on the commodities market…I’m talking actual gold & silver. I’ve been doing very well too…when investing in precious metals, a failing US economy, inflation and declining dollar values actually benefit me. Shown graphically, here’s what gold has been doing over the last seven years:
I have particularly enjoyed being in the silver market as I believe it’s greatly undervalued and has an opportunity to explode to levels we haven’t seen since the 80’s. With reports of paper-based silver commodity trading outweighing actual supply by more than two thirds, Wall-Streeters are trading something that doesn’t actually exist! From cursory knowledge of “supply and demand” (you remember that don’t you?), physical silver a prime place to be if those paper silver owners ever actually want to take possession of said silver. The last seven years of silver’s value show a steadily rising trend, just as we saw with the gold trends.
So, if that’s not enough to convince you to bail on the US dollar, I don’t know what will. Admittedly, by doing so, we would nearly insure the collapse of the US dollar. The way I see it, it’s the inevitable result of failed monetary system consisting of a privatized central banking system called the Federal Reserve and decades of financial policy that give no regard to wise fiscal management. We need to do away with the Federal Reserve anyhow…so I really see it as a means to an end. Sure, it’s gonna suck…but if you start planning now, you *might* just escape while there’s time.