U.S. Dollar

US Dollar Devaluation Prediction for 2015

A debt crisis has taken the western world by storm, but few seem to be sounding the alarm. The U.S dollar, the go-to currency for global economic stability and growth, is imploding at an unprecedented rate.

Profit Confidential editors have been critics of the U.S.’s inability to reign-in government spending. Based on the White House’s own figures, the national debt will reach $20.0 trillion by the end of this decade—about 140% of our current gross domestic product (GDP).

Historically, countries that have incurred considerable debt and consistent national debt-to-GDP multiples of 120% or more have experienced currency devaluation. The U.S. dollar has been in a free-fall against other major world currencies since 2009.

You have to print money to make money. No one knows this better than the Federal Reserve. Since November 2008, the Federal Reserve has initiated three rounds of quantitative easing (QE) in an effort to create more economic activity and increase home prices.

What have three rounds of QE accomplished? It was supposed to increase lending, create more jobs, and lower the unemployment rate. Instead, banks are sitting on a pile of cash and remain tight-fisted, fewer jobs have been created, and the real unemployment rate remains high.

What QE has done is flood the global markets with trillions of U.S dollars. It’s not as if this new-found money is backed by gold. It’s simply created out of thin air.

What’s keeping the U.S. economy afloat? The Federal Reserve has artificially propped up the U.S. economy by buying a majority of the government debt issued by the Treasury department. As a result, the U.S. government has become dependent on borrowing (creating money) to finance itself.

At Profit Confidential, we expect the U.S. dollar to devaluate as the U.S. continues to pile on the debt. You can find regular commentary on the U.S. dollar in Profit Confidential.

Federal Reserve, U.S. Dollar: 2 Factors Supporting Higher Gold Prices

By Thursday, March 26, 2015

Gold PricesI am looking at two factors to see where gold prices are headed next: the Federal Reserve’s actions and the U.S. dollar. They are unanimously pointing toward the upside.
Let me explain…
Price of Gold and Federal Reserve’s Interest Rates Decision… Read More
On March 18, the Federal Reserve provided guidance on what it will do regarding interest rates.

U.S. Dollar Strength the Real Threat to Investors, Not Higher Interest Rates

By Friday, March 13, 2015

US Dollar strengthThere are issues brewing in the stock market with interest rates fears and the strengthening greenback that could drive the S&P 500 lower by five percent or more.
When Will the Fed Increase Interest Rates?
First, we have the fears surrounding rising interest rates after the strong improvement in the unemployment rate to a pre-recession low of 5.5%…. Read More

Strong U.S. Dollar: How Much of a Stock Market Threat?

By Wednesday, March 11, 2015

U.S. Dollar StrengthImproving unemployment numbers added fuel to the rise in the U.S. dollar. While the U.S. dollar’s strength is likely to be a major issue this year, long-term investors shouldn’t worry.
Let me explain…
U.S. Dollar Gaining Strength
There is a glimmer of hope, as the U.S. dollar index (a measure of the U.S. dollar’s strength relative to a number of other currencies) hits multiyear highs…. Read More

Rising Debt, Soft Dollar; Gold the Only Protection for Investors

By Friday, December 19, 2014

Protection for InvestorsWe’re only into the second month of the U.S. government’s current fiscal year and we’ve already racked up a budget of $179 billion. (Source: U.S. Bureau of Fiscal Service, December 10, 2014.)Read More
When the government incurs a budget deficit, it has to borrow money to pay for its expenses. Over the past few years, due to increased spending, the U.S.

About the 40% Collapse in the Use of the Dollar

By Monday, December 8, 2014

U.S. Dollar at Accelerated PaceSince July of this year, the U.S. dollar is up about 10% against a basket of other industrialized world currencies. Some say the dollar is up because the Federal Reserve has stopped printing paper money (while other countries are still printing) and because the Fed has said it will raise interest rates in 2015 (while other countries are still lowering their rates)…. Read More

×