The American Economy Might Surprisingly Benefit From the Falling Dollar
National and private debt numbers are approaching heights so distant that they rise into the clouds.
Half of the country is in debt, and the other half is in virtual foreclosure.
Only a marginal fraction of the population is debt free, but most are in debt to someone.
It's painfully ironic when lenders are debtors too.
There is a temptation to be dismal about the situation, but we must not take that route.
The solution is to know what to do next.
Economies Can Rebound Quickly In times past, the bubbles popped with great force and resulted in terrible consequences.
On Black Thursday in 1929, thirty billion dollars disappeared in a single afternoon leading to what is commonly known as the Great Depression.
Today, that would be a trillion dollars or more.
Imagine that, a trillion dollars gone in six hours.
After this event transpired, the economy slumped for ten years until World War II began to demand more from America.
The economy then rebounded suddenly as thousands of factories with millions of new jobs emerged with the help of national debt.
After the war, the economy was still booming and continued to boom for quite some time.
Because factories and infrastructure resulting from the war could crank out products like never before, debtors paid off their debts both publicly and privately.
This Economy Can Rebound Too Today, the economy is seeing similarities to the Great Depression.
But this time, it's happening after the war.
The war in Iraq, right or wrong, good or bad, has been very costly because it did not add new infrastructure.
It simply used the infrastructure already present.
Many factories before the Iraq war were running at 30% capacity or less.
Now they are running at 50-55%.
But few new factories and industries have been built.
The same factories making materiel for peacetime are now the same factories making materiel in wartime.
When the war is over, those same factories will remain.
This means there is little chance that the postwar economy will be more prepared to pay off war debts than was the post WWII economy.
Something else must happen.
Wars no longer fix economies because wars no longer build infrastructure--at least, not for America.
The dollar is going to fall, and fall fast.
It will be inflated to a very high degree and will do so very quickly.
The best way to cope is to own something valuable so that when the dust clears you still have something people will likely want to buy.
But one benefit from the falling dollar is that other currencies, valued higher than the dollar, will be looking to buy things cheap.
And when their currency is far more valuable than the dollar, they will buy American.
Countries will start looking to American factories and American suppliers for goods and exports.
American exports will be cheap and American manufacturing will be incredibly busy.
And busy manufacturing puts millions to work-many millions.
What You Can Expect and How You Can Benefit From It It is likely that the dollar will begin falling dramatically in 2009.
Consumers, commerce and many industries will suffer.
Other nations with solid currencies will look to American factories for cheap goods.
The goods will be so devalued that a foreign teenager's wage will be able to buy an American TV without financing.
We must understand that industry is the place to invest in a recession.
It is the only place to invest in a recession.
In the past, wars pushed industry along, and therefore the economy.
Then, debts could be repaid.
Now, the only thing to push industry along is willpower.
If we invest elsewhere, a falling dollar will destroy that investment.
Don't invest in bonds, ARMs, retail, consumer services, or anything intangible.
Invest in mining and industrial corporations who manufacture physical items and export them or supply them to retail stores for distribution.
The only other place to invest wisely is in charity, where gains are not measured in dollars.
Don't Look Now, but It's Already Happening Most commerce, retail, and service businesses are taking terrible hits.
Some industries are also struggling.
Ford is planning on cutting thirty thousand jobs in the near future and Dell is planning on cutting eight thousand.
But what you might have missed is that several industries, for example this metal fabrication company, reported record gains in the fall of 2008 and hopes to be heading for a record 2009.
This company's suppliers are having record sales as well due to greater market demand.
Since commodity prices and natural resources have fallen so rapidly, it has contributed to steady gains in the industries that utilize those commodities.
If this trend is national, it represents a move that America has not seen in decades: a shift from a consumerist nation to an industrial nation.
Service industries like retail stores, theatres, fast food restaurants, and the like are not able to rebound an economy.
They just tell you how well the economy is doing.
Companies that actually produce physical goods, not sell them to consumers, are the indication of a thriving economy.
Selling happens after a good is produced, not before.
Companies that sell things need to be a second priority after those that make them.
What Government Can Do Now I would recommend that the government simply cut taxes and restrictions on industries and companies producing physical materials and goods.
This would include mines, manufacturing companies, national infrastructure, and energy-generating facilities.
These companies provide quality jobs that genuinely help the economy, add consumer items to the pool and keep things cheaper for the average American, and grow the economy rather than just use it.
The industries that make an economy powerful and sustainable are mines and factories.
When factories come to a town, the town flourishes with services and commerce.
When factories leave a town, a wave of deficits, crime, and gray skies hit the area.
As the dollar continues to decline, I respectfully recommend that the new President help American industries get a head start on the massive amount of orders that will begin coming in from foreign nations looking for cheap exports.
Half of the country is in debt, and the other half is in virtual foreclosure.
Only a marginal fraction of the population is debt free, but most are in debt to someone.
It's painfully ironic when lenders are debtors too.
There is a temptation to be dismal about the situation, but we must not take that route.
The solution is to know what to do next.
Economies Can Rebound Quickly In times past, the bubbles popped with great force and resulted in terrible consequences.
On Black Thursday in 1929, thirty billion dollars disappeared in a single afternoon leading to what is commonly known as the Great Depression.
Today, that would be a trillion dollars or more.
Imagine that, a trillion dollars gone in six hours.
After this event transpired, the economy slumped for ten years until World War II began to demand more from America.
The economy then rebounded suddenly as thousands of factories with millions of new jobs emerged with the help of national debt.
After the war, the economy was still booming and continued to boom for quite some time.
Because factories and infrastructure resulting from the war could crank out products like never before, debtors paid off their debts both publicly and privately.
This Economy Can Rebound Too Today, the economy is seeing similarities to the Great Depression.
But this time, it's happening after the war.
The war in Iraq, right or wrong, good or bad, has been very costly because it did not add new infrastructure.
It simply used the infrastructure already present.
Many factories before the Iraq war were running at 30% capacity or less.
Now they are running at 50-55%.
But few new factories and industries have been built.
The same factories making materiel for peacetime are now the same factories making materiel in wartime.
When the war is over, those same factories will remain.
This means there is little chance that the postwar economy will be more prepared to pay off war debts than was the post WWII economy.
Something else must happen.
Wars no longer fix economies because wars no longer build infrastructure--at least, not for America.
The dollar is going to fall, and fall fast.
It will be inflated to a very high degree and will do so very quickly.
The best way to cope is to own something valuable so that when the dust clears you still have something people will likely want to buy.
But one benefit from the falling dollar is that other currencies, valued higher than the dollar, will be looking to buy things cheap.
And when their currency is far more valuable than the dollar, they will buy American.
Countries will start looking to American factories and American suppliers for goods and exports.
American exports will be cheap and American manufacturing will be incredibly busy.
And busy manufacturing puts millions to work-many millions.
What You Can Expect and How You Can Benefit From It It is likely that the dollar will begin falling dramatically in 2009.
Consumers, commerce and many industries will suffer.
Other nations with solid currencies will look to American factories for cheap goods.
The goods will be so devalued that a foreign teenager's wage will be able to buy an American TV without financing.
We must understand that industry is the place to invest in a recession.
It is the only place to invest in a recession.
In the past, wars pushed industry along, and therefore the economy.
Then, debts could be repaid.
Now, the only thing to push industry along is willpower.
If we invest elsewhere, a falling dollar will destroy that investment.
Don't invest in bonds, ARMs, retail, consumer services, or anything intangible.
Invest in mining and industrial corporations who manufacture physical items and export them or supply them to retail stores for distribution.
The only other place to invest wisely is in charity, where gains are not measured in dollars.
Don't Look Now, but It's Already Happening Most commerce, retail, and service businesses are taking terrible hits.
Some industries are also struggling.
Ford is planning on cutting thirty thousand jobs in the near future and Dell is planning on cutting eight thousand.
But what you might have missed is that several industries, for example this metal fabrication company, reported record gains in the fall of 2008 and hopes to be heading for a record 2009.
This company's suppliers are having record sales as well due to greater market demand.
Since commodity prices and natural resources have fallen so rapidly, it has contributed to steady gains in the industries that utilize those commodities.
If this trend is national, it represents a move that America has not seen in decades: a shift from a consumerist nation to an industrial nation.
Service industries like retail stores, theatres, fast food restaurants, and the like are not able to rebound an economy.
They just tell you how well the economy is doing.
Companies that actually produce physical goods, not sell them to consumers, are the indication of a thriving economy.
Selling happens after a good is produced, not before.
Companies that sell things need to be a second priority after those that make them.
What Government Can Do Now I would recommend that the government simply cut taxes and restrictions on industries and companies producing physical materials and goods.
This would include mines, manufacturing companies, national infrastructure, and energy-generating facilities.
These companies provide quality jobs that genuinely help the economy, add consumer items to the pool and keep things cheaper for the average American, and grow the economy rather than just use it.
The industries that make an economy powerful and sustainable are mines and factories.
When factories come to a town, the town flourishes with services and commerce.
When factories leave a town, a wave of deficits, crime, and gray skies hit the area.
As the dollar continues to decline, I respectfully recommend that the new President help American industries get a head start on the massive amount of orders that will begin coming in from foreign nations looking for cheap exports.
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