HEADLINE: Dollar Falls Most in Month as China Urges New Reserve Currency. That was the June 27 headline at Bloomberg.com, published by the Bloomberg Professional, a service terminal that provides real-time financial news, market data, and analysis.
The U.S. Dollar declined the most against the Euro and dropped in value versus the Yen after China challenged Obamanomics and repeated its call for a new global currency.
What does the decline in value of the dollar mean for you and me? In a capsule, according to the Gerson Lehman Group, its devaluation means higher prices for our every day goods and commodities, as they are expected to continue to rise along with the value of energy, oil, precious and base metals. Fuel costs will increase, and consumer credit will shrink while inflation increases (punishing those like me and others on a fixed income).
The opponents of the president’s ominous Cap-and-Trade bill that passed recently in the U.S. House of Representatives said much the same. In the opinion of millions it’s a new, unfair tax on energy consumption that will essentially increase the costs of everything we use. Slowdowns in corporate production will ensue. American businesses relocating offshore would result, subsequently followed with the loss of American jobs.
Some politicians say the bill makes sense because if energy costs rise, consumption will be less. The nebulous reasoning is that we’ll then lessen our dependence on foreign oil and somehow change our planet’s climate. Is this like rearranging the chairs in a restaurant’s public smoking section while the growing smoke cloud lingers everywhere? With China and India’s growth, the pollution on the planet increases while our cost of living increases and our standard of living erodes, the economy continues to founder, and worse, the central federal government attains more power. We are the losers.
Sources: www.bloomberg.com; www.glgroup.com/