If the dollar is worth less, is the economy really improving?

Posted By on April 29, 2011

Call me a negative Nellie, but one has to wonder if we are really seeing much of an economic recovery? With prices rising, inflation looming (if not already here) and the buying power of the dollar severely weakened over the past year, how will Americans perceive those elected and appointed to guide the United States out of the recession? So far by my calculations … not so good.


Besides the reduced real life purchasing power that most of are noticing, if we are fortunate enough to be earning an income, our savings (loss of value if saved in US dollars), retirement accounts and investments may not be recovering as much as we all think. Take a look at this past years stock market recovering (DOW top chart) … look prettywheelbarrowfullofusdollars good, right? But … realized that it nearly mirrors the dollars devaluation (NYBOT Dollar index bottom chart).

In real ‘buying power,’ a dollar ain’t what it use to be, whether you’re buying mutual fund or individual company shares, pork bellies, precious metals or a gallon of gasoline. How long before it takes a wheelbarrow full of greenbacks to buy your groceries?

EDIT 4/29/2011:Adding a very worthwhile CNBC interview with John Malone and his extremely insightful comments regarding our current economic situation.

CNBC video content no longer available


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