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American Dollar Problems, or How I Learned To Hate the Debt Ceiling and the Fiscal Cliff

Updated on November 18, 2013

The Start of the Fall of America?

This is a scary video about what is happening in America today.

The scary problem is that no one knows it is happening.

Before you know it, our liberties will be lost.

Watch it and see if you agree with the majority.




Current events in the United States have caused me to hate the debt ceiling and the fiscal cliff.

Economies around the world have been frequently hit by periods of inflation that have had detrimental effects and key players are slowly considering other options that can assure stability. The American dollar problems are actually related to the lack of stability of the dollar. People are afraid of money and the very rich prefer to store their wealth as gold bullion in banks. Essentially, money came about as a medium of exchange that was acceptable in the settling of debts and in buying and selling of goods and services.

Traditional Systems

Initially, economies were not as complex as the ones we witness today and the money system functioned effectively. Evidently, all the money that circulates in most systems is money from private banks that is lent to government-owned banks as interest. The banks issue the money as loan or they give it back to the system by using it to purchase assets. However the system is much more complex leading to problems with the dollar.

Inflation

The American dollar problems are deeply tied to inflation. When the flow of money is too much in the system, the value of money goes down because everybody will have money and money will lose its competitiveness as the medium of exchange. Such a situation is known as inflation. On the other hand when money is too little in the system the purchasing power of the population will be greatly affected because very few will have the capacity to buy or sell. In essence, private banks are mandated by government-owned banks to control the flow of money by fluctuating the interest rates they charge on loans.

Problems with Private Banks

Private Banks have not effectively handled the flow of money effectively evident by the constant financial crises especially in complex economies of he developed world an example which is the American dollar problems The closest alternative to the money system that has been proposed by many is the gold and silver system. However, even this system as its own disadvantages considering that you cannot carry gold coins around everyone you go especially in this age of plastic money. Let us first discuss the two systems in depth before we arrive at a conclusion.

The Monetary System

How it Works

The monetary system is essentially a set of policies that have been set by a particular government to be used by private banks in the management of demand and supply of money. In the US the Federal Reserve gives the mandate of controlling the supply and demand of money to private banks. The Federal Reserve in turn comes up with rules and regulations that serve as guidelines and ensure that the private banks do not abuse he mandate. In essence, even the money used by the Federal Reserve has been borrowed from private banks to be repaid with interest. In times of inflation the private banks will increase the rate of interest earned on banked money to encourage people to remove money from the system. In times of deflation the private banks will reduce the interest rates on loans as a way of encouraging people to take loans. In reality the system is not as simple as it seems and the private banks due to a combination of factors and in the increasingly complex American dollar system have not been able to deal with the issue effectively. The situation has even been made worse by other players such as insurance companies and real estate companies whose major priorities revolve around making of profit and care little about the demand and supply of money.

Proposed Remedy

The monetary system is at its weakest point when the private banks and the Federal Banks lose control of the supply and demand of money. During such instances, the banks should ensure that they provide alternatives until the American dollar problems subside. The best remedy during such times is the silver and gold system because silver and gold have actual and not virtual value attached to them. This will ensure that people with silver and gold reserves can later sell the silver and gold to the government thereby ensuring that they do not lose value of their wealth in situations of inflation and American dollar problems.

Buying gold as a hedge against the vagaries of the market, or the frivolity of the economies is one way to protect your wealth. Accumulating gold as a wealth preservation tactic is one of the oldest methods of protecting one's wealth. Obama may even be doing this for his own portfolio.



Gold Bullion

Where has all the Gold in Fort Knox gone?

Where has all the Gold in Fort Knox gone?

What is supporting the American dollar? Nothing!

Watch this video and see how the American people have been scammed.

Do you believe the Federal Reserve when they say they are confident in the economy?

See results

5 Lies the Feds Are Telling Us!

1. The economy is in good shape.

2. Interest rates will remain stable.

3. Unemployment is decreasing.

4. The dollar is strong internationally.

5. Our standard of living is increasing.

The Obama Debt Ceiling!
The Obama Debt Ceiling!

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