There’s Judy Shelton, who is on a roll writing terrific articles in the Wall Street Journal. Today she has published another stern reminder of the slow death of the dollar.
Unprecedented spending, unending fiscal deficits, unconscionable accumulations of government debt: These are the trends that are shaping America’s financial future. And since loose monetary policy and a weak U.S. dollar are part of the mix, apparently, it’s no wonder people around the world are searching for an alternative form of money in which to calculate and preserve their own wealth.
…But as the dollar is increasingly perceived as the default mechanism for out-of-control government spending, its role as a reliable standard of value is destined to fade. Who wants to accumulate assets denominated in a shrinking unit of account? Excess government spending leads to inflation, and inflation plays dollar savers for patsies–both at home and abroad.
Her analysis of the looming federal debt fiasco is spot-on, and as she notes, the regime’s budget numbers do not include health care reform or the quietly proposed second stimulus package (or packages). Then there’s Timmy Geithner. In a discussion with the chief editor of China’s Caijing, Geithner stated that “investors have shown confidence in the U.S. government’s ability to maintain sustainable growth” and such confidence has helped stabilize the value of dollar assets. He dances around the issue of the diving dollar, and can only mutter such irrelevant filler as, “The dollar’s role comes with special burdens and responsibilities that require we are especially careful to sustain confidence in U.S. financial assets.”