Between Dow Jones And Six Million Dollar Man
Of late, the value of the US Dollar has been falling, which has had an inevitable impact upon the price of US stocks. But why exactly has the US dollar been falling, will it continue to do so and should this be something to worry about? Fat Prophets investigate.
For some of us who grew up in the 1970s, the television program "The Six Million Dollar Man" will be a nostalgic experience. Many will remember the show's famous tagline "... A man barely alive... Gentlemen, we can rebuild him ... we have the technology. We have the capability to make the world's first bionic man. Steve Austin will be that man. Better than he was before, Stronger, Faster..."
Of course the bionics and all that rebuilding came at a price. Back in the 1970s it took $6 million dollars to rebuild Steve Austin. Today $6 million dollars wouldn't buy a bionic finger, let alone bionic legs or a bionic eye! In fact, if Steve Austin was re-launched in a new show today, we believe the producers would have to up the ante and call it The Six Billion Dollar Man!
In the report last week, we addressed some of the major inflationary issues facing the US economy and why we believe the dollar will come under severe pressure over the next few years. So now we ask: why has the US Government let the value of the currency fall so much?
To answer this question we need to look back at history. Since 1944, following the famous meeting of the global central bankers at Bretton Woods in New Hampshire, it was decided that the US dollar would assume the privilege of becoming the world's reserve currency.
This status was important because effectively, it meant that nearly all countries in the world would trade with one another using dollars as the medium of exchange. In addition, the central bankers agreed that a gold standard would be adopted by the US Government. This would literally anchor the value of the US dollar to a tangible asset.
For some of us who grew up in the 1970s, the television program "The Six Million Dollar Man" will be a nostalgic experience. Many will remember the show's famous tagline "... A man barely alive... Gentlemen, we can rebuild him ... we have the technology. We have the capability to make the world's first bionic man. Steve Austin will be that man. Better than he was before, Stronger, Faster..."
Of course the bionics and all that rebuilding came at a price. Back in the 1970s it took $6 million dollars to rebuild Steve Austin. Today $6 million dollars wouldn't buy a bionic finger, let alone bionic legs or a bionic eye! In fact, if Steve Austin was re-launched in a new show today, we believe the producers would have to up the ante and call it The Six Billion Dollar Man!
In the report last week, we addressed some of the major inflationary issues facing the US economy and why we believe the dollar will come under severe pressure over the next few years. So now we ask: why has the US Government let the value of the currency fall so much?
To answer this question we need to look back at history. Since 1944, following the famous meeting of the global central bankers at Bretton Woods in New Hampshire, it was decided that the US dollar would assume the privilege of becoming the world's reserve currency.
This status was important because effectively, it meant that nearly all countries in the world would trade with one another using dollars as the medium of exchange. In addition, the central bankers agreed that a gold standard would be adopted by the US Government. This would literally anchor the value of the US dollar to a tangible asset.
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