The World's Dollar Drug

How long can the USA keep printing money? How come we aren't in the same trouble as Greece and Spain even though we have overspent? If creating money is as easy as printing it, how come the U.S. government doesn't print enough to then give everyone $1 million dollars so we can all pay off our debts and start vacationing again?

Those are all good questions. Sadly most of us have simply assumed that there are REALLY SMART people who have all these things figured out. We haven't a clue...but we surely hope that someone does.

What if you found out that the REALLY SMART people are the one's who got us into this financial mess...and are continuing to do things that will sink us? Should that concern us??

Today in the Wall Street Journal we have a very well written article about WHY the USA dollar is the world's reserve currency and WHY we can't print money forever without repercussions.

For all the talk about the problems of Greece and their implications for the euro zone, there is another currency that presents equally profound problems: the U.S. dollar. The dollar is, as everyone knows, the world's reserve currency, and it widely seen as a boon and an anchor for the emerging global economic system. It is also the only thing standing between the United States and its own moment of reckoning, and that is not a good thing.

Then, in 1971, President Richard Nixon ushered in the era of fiat currency when he announced that the U.S. government would no longer allow foreign nations to redeem their U.S. dollars for gold.

The move came in response to rising inflation in the U.S. It also came in response to competitive pressures from Germany and Japan, which were beginning to undermine American manufacturing—a decline that has continued unabated since and can only be laid at China's door by a willful forgetting of the legacy of a host of lower-cost competitors over the past 40 years. By the early 1970s, the U.S. was importing heavily from new manufacturing centers outside America (though not yet running trade deficits) and being forced to redeem ever larger amounts of dollars for rapidly dwindling reserves of gold.

The U.S. government uses its dollars—and the ability to print them and borrow them—poorly. Large amounts of debt fund consumption of goods and health care. While today's needs are important, without sufficient investment those dollars will dissipate. You'd lend someone money to open a business or invent a new energy source, but not for dinner and a movie. Yet because of the dollar, America tends to get the money it wants. And so the dollar as an anchor of the global system forestalls fiscal crisis in the U.S. while allowing for gradual decay of the American economy.

This can go on for many years. The world needs a reserve currency to reduce costs and allow market players to assess value across different countries and economies. But that need for the dollar shouldn't be confused for American strength.

See it here; http://online.wsj.com/article/SB10001424052748704342604575222701291563876.html

So the GOOD NEWS folks is that our financial system and U.S. dollar may stay solvent for some time....even though it will be in constant decline as we spend all our wealth on health care and have moved most of our manufacturing overseas.

Of course at the rapture of the church, America's fate will be sealed and you won't be able to give away a U.S. dollar because there will be only a shell of the "full faith and confidence" that currently backs our money.

The REALLY GOOD NEWS is that none of us who have trusted in Christ for our salvation will be left behind to watch America crumble. We will be at the wedding feast of the Lamb...and what a day that will be!