Why Washington is Printing Money

I had a brainstorm today. I read a post on a gold website that basically said that a weaker dollar is a good thing because it creates a situation where the US can export more. In other words, it makes US-produced goods cheaper overseas, and thus more attractive and competitive.

In my time spent in New Zealand, a strong NZ dollar was viewed as a bad thing because NZ depended on exports and tourism. As the NZ dollar became stronger, their exports became more expensive and it became more expensive for tourists to spend money in NZ.

The reality of cheaper exports also made me think of one of the economic goals of Obama: We need to make things again.

With a strong dollar, why aren't we making things anymore? Because our cost of labor is too high, and thus manufacturers move overseas where labor is cheaper.

With a weaker dollar, our goods become more attractive.

Why? Because with a weaker dollar, we pay our workers the same salary and benefits in cheaper dollars. In essence, it is a pay cut without having to admit it is a pay cut, because while the workers are paid the same dollar value, the purchasing power of those dollars is diminshed.

Cheaper dollars also can lessen the impact of the unfunded liabilities of Social Security and pension funds for retirees. With a weaker dollar, we pay our retirees the same benefits in cheaper dollars. In essence, it is a cut in benefits without having to admit it is a cut. Because those dollars cannot buy the basic necessities, retirees will have to work longer instead of retiring and enjoying "the good life."

Obama and the Federal Reserve are cowards, because they are destroying the dollar to do what needs to be done, which is this: Unions need to renegotiate their contracts to make the US competitive again, and retirees need to work longer before they retire and collect benefits. A weaker dollar accomplishes these things without having to make the tough decision, and as a result all of our savings are destroyed as well.

This is what the economic wizards in Washington DC are doing. It is evil. It is immoral. And it is invisible to the public at large. When invisible, and complex, those unaccountable few who make these decisions will not have suffer the political consequences.