Who Is Swiping Your Dollars?

 The US Government – that’s who.

Up until September, 2009 – it took nearly 14 years to double the cash held in US Banks.  After this date, it took the Fed less than 4 months to double the size of US bank reserves.

This should scare you – because the store of your monetary value is in the US dollar.  And it should also, motivate you to invest to counter this action.

This is a dramatic move on the part of the Federal Government – and prior to this, even in extreme circumstances, the Fed has never taken this road of pumping so much liquidity into the economy. 

But how does the government pay for a mountain of debt, you ask?  There are three ways – it can raise taxes, borrow from other counties like China, and print money.  When the government prints money, and there are more dollars in circulation such as now, the value of your dollar in purchasing power hugely declines. 

This is evident.  Just look to our neighbors to the north – the Canadian dollar is becoming more valuable than the American dollar.  In the past, you could take a vacation in Canada and enjoy a discount in prices when you paid with the American dollar – not any more. 

So here’s what happens to you when the US Government prints all of this money – it is a confiscation of American wealth.  You have to pay more dollars for goods and services – watch the price of gas go up – and the grocery store, Wal-Mart and the likes these suppliers of goods – where commodities are purchased offshore – will have to pay more and sell for more. 

As Americans, we have to tighten our belt.  And, as investors, this is the age of investing in commodities like gold and silver – tangible assets that are in limited supply and where investors recognize a ‘store house’ of value. 

Three good ETFs for this are the symbol GLD (SPDR Gold Shares) and the symbol SLV (iShares Silver Trust) and the symbol JJC (iPath UBS Cooper Shares).