The Biggest Ponzi Scheme on the Planet-The U.S. Government
"American Economic Exceptionalism Explained"                     USAPonzi                                      by John W. White   Mar 29, 2013

Devaluing the Dollar!
Nov 2013

How much are we devaluing the dollar? About 5% per year!   


If we do not quit spending and taxing as we are today then the only hope is for the Federal Reserve Bank to eventually increase securities purchases (or some other form of money printing) from the current (as of November 2013) $85B per month to $442B per month ($5.3T/year that our Financial Burden is increasing, i.e. the amount of our GAAP-basis Deficit) to close the gap.  The majority of this GAAP-basis Deficit is due to Unfunded Liabilities and since these liabilities have not yet come due, the debt has not been incurred but the recipients of the benefits are anticipating these benefits and are making explicit or implicit commitments based on this anticipation.   Also, many people that are employed either directly or indirectly by the U.S. Government are anticipating that they will continue to be paid by this deficit spending and they too are making either explicit or implicit financial commitments based on the expectation that deficit spending will continue. 

Using a first order approximation, let’s see how much this $5.3 Trillion of GAAP-basis Deficit spending is devaluing our currency.  The www.usdebtclock.org website currently puts our total national assets at $105.7T.  That would mean that at this marginal level the value of the dollar would drop by about 5% per year since we would now have $111.0T dollars chasing that $105.7T worth of assets ($111T/$105.7T = 1.05).  This 5% devaluation would cut the buying power of the dollar in half in just 14 years.:

Year           0     1     2     3     4     5     6     7     8     9   10   11   12   13   14
5%           1.0  .95  .90  .86  .81  .77  .74  .70  .66  .63  .60  .57  .54  .51  .49

Next page: Sequester

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year       0       1       2       3      4       5       6       7        8       9      10
2%       1.00  0.98  0.96  0.94  0.92  0.90  0.89  0.87  0.85  0.83  0.82
7%       1.00  0.93  0.86  0.80  0.75  0.70  0.65  0.60  0.56  0.52  0.48