Tuesday, November 6, 2007

Save that Confederate Money...The South will raise again

Money is a funny thing. It all started a long time ago with the old "barter" system. I will trade you a cow for your wagon kind of thing. Soon people ran out of stuff to trade that both they, and the other guys wanted. Everyone wanted Gold so they agreed to use Gold and Silver as an exchange currency. Thus...money was born.

People wanted to control money so they started making gold and silver coins. They had pictures of dead guys on them with cool sayings like, "hurry for our side". Some places would only accept coins from one country or state. There was a little confusion over what a coin was worth. The market...our old friend, supply and demand, helped adjust the value and things worked out.

The Beatles said it best..."I read the news today oh boy". Money is in trouble. To be more clear, OUR money is in trouble. The good ol US of A green back is becoming the US Peso. You probably don't pay too much attention to the Euro or the Pound...money from Europe. Well they are kicking the dollar in the ass. When the Euro first started back in 2002 it was worth one US dollar. Today it is worth $1.45 US dollars. In five years the dollar has declined 45% versus the Euro.

OK so what? Who cares about the Euro or Pound? Well, let me "splain it to ya"

Stuff, anything you want or need, comes from someplace. Like Coffee, we don't grow it in America. It comes from Africa and South America to name a few places. Coffee is sold on the world commodity market. Guys who have it want to sell it. People who buy it need money to pay for it. Now here is the tricky part.

If you are selling something do you want to be paid in Dollars or Euros? If they were both worth the same it would not matter much. Back in 2002 people selling stuff took both because they were worth the same. But over the last seven years the Euro has become worth more. So now it takes MORE dollars to buy the same stuff that one dollar bought back then. Today 100 Euros is worth 145 Dollars. More important, if you take Euros, you are almost 100% sure that they will be worth the same a year from now. The dollar is a crap shoot.

All this means is the stuff we buy from other countries is getting more expensive. Things like oil, TVs, cars, cell phones, shoes and shrimp all come from someplace else. The dollar is worth less and falling. Stuff we want is going to cost MUCH MUCH more. And, you will not get a raise to buy this stuff. Oil is up to almost $100 per Barrel. This will mean $4.00 + per gallon Gas. Add the price of gas to the increase in freight. Everything we buy is shipped to us by boat or on a truck. This means everything...yes everything, will cost more by 2008 because the dollar is worth less.

So why is the dollar falling in value? Well, there are two good reasons. First we are spending too much on a WAR in Iraq. A country, like a person can not spend more then they earn. America is over spending like drunken sailors on leave in Vegas. I think the WAR cost a BILLION dollars a month. We are also spending too much on dumb shit stuff like searching old lady's at the airport or on the "War on Drugs". Airport searches and the so called Drug War cost us about 2 million a day. Ya, 750 million dollars a year.

The second reason the dollar is falling is due to the "sub Prime" home loan crisis. People did stupid stuff to borrow money on Homes that were way way too over priced. Then they weren't able to pay the money back. Banks are loosing money and this is hurting the value of real estate and financial corporations. The stock market is a mess and the poor dollar is suffering.

I'm writing all this to tell you it will take 10 years to dig out from under this financial mess. I also think that this is what Al Qaeda planned all along. The best "defeat" for America is economic defeat. We have over spent on a WAR and wasted money at home. Now our money isn't worth shit and we can't buy the things we need. All these things are connected: The WAR, price of gas, falling value of the dollar and your pay check.

Think about this when you vote. We need to stop spending before we go broke.

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