Channel Button

There are 27 articles on this title. You are reading the article ranked and rated #1 by Helium's members.

Politics, News & Issues   >

US Economy

Get a Widget for this title

Why is the American dollar losing value?

The world-wide comparative value of the American dollar is falling. Why? The answer is not known by many Americans, who are more aware of consumer-side conditions in America which affect them immediately and directly. Yet the fall of the dollar against other currencies reflects a long-term condition which, if not corrected, is likely to end the high standard of living in America and severely reduce, if not eliminate, the American middle class.

There are several factors at work here. First, the trade deficit-think of it as debt-is the largest factor in the dollar's fall. The United States imports than it exports. It sends
more money to other countries than it takes in. Oil imports are the biggest purchase America makes, but consumers buy autos, electronics and food from foreign sources as well. Offshore outsourcing of jobs is another outward-bound money stream. In order to balance this outflow, the US must bring back funds from other countries in the form of loans and investments in an amount in excess of $2 billion every business day. Yes, that's every day.

Some of this incoming investment produces growth and real dollar value. Most, however, pays for government deficit, stock market speculation, and consumer credit lending. The money you spent after refinancing your mortgage came from and went back to other countries. Until recently, consumers in America increased their spending every quarter back to 1987. Loans, in addition to income, supported this spending. These loans created more debt. US household debt is now at a level many consider unsustainable. Inflated housing values produced debt, and falling prices along with widespread loan defaults have pulled down banks and mortgage lenders. More debt. Current intervention by the Fed has propped up the ailing mortgage market, but housing values have dropped, so the influx of mortgage loan investment capital will be short term.

Other developments have contributed to the fall of the dollar. The Enron, WorldCom and Tyco scandals reduced confidence in accounting methods and US government oversight procedures. Foreign investors had less confidence in American stocks, bonds and other investments. They stopped investing and sold off their portfolios. Money began to flow out rather than into the US economy.

Government budget deficits created by tax cuts and military spending have run through the ceiling now, and state and local governments are running high deficits as well. US government unilateral global policies


Below are the top articles rated and ranked by Helium members on:

Why is the American dollar losing value?

  • 1 of 27

    by Robert Griffith

    The world-wide comparative value of the American dollar is falling. Why? The answer is not known by many Americans, ... read more

  • 2 of 27

    by Paul Lines

    The change in the value of the dollar is determined by a number of key issues and economic factors. These can be brou... read more

  • 3 of 27

    by Simon D. Lewis

    The American dollar is losing value because our government is creating money at rates that far exceed the rate of eco... read more

  • 4 of 27

    by Linda Sunkle-Pierucki

    All across America, housewives are gripped with fear when the clerk rings up their cart of groceries. Breadwinners c... read more

  • 5 of 27

    by Anthony Klika

    To understand what is really happening one must first have some sort of background in economics. This section is aim... read more

View All Articles on:
Why is the American dollar losing value?

Add your voice

Know something about Why is the American dollar losing value??
We want to hear your view. Write_penWrite now!

What do you know about?
  • Tell us! Get published today.
  • Reach millions.
  • Many ways to earn.
Join Helium Today

Already a member? Log in.

Helium Debate

Cast your vote!

Should the US spend taxpayer money to reduce conventional arms caches worldwide?

Click for your side.

193696

Featured Partner

International Human Rights Group

IHRG Mission Statement: Standing for Religious Liberties for All We believe that religious liberties are the fo...more

What is Helium? | Help | Contact Us | Community | Helium’s Official Blog | Link to Helium | Privacy | User agreement | DMCA

Helium, Inc.
200 Brickstone Square Andover, MA 01810 USA