Who Shot The Dollar?????

This is from our friends at Personal Liberty;

 

Who Shot The Dollar?

June 15, 2011 by John Myers

Who Shot The Dollar?
PHOTOS.COM
President Barack Obama delivered the deathblow to the dollar.

Who killed the U.S. dollar? This question will be debated by future historians. Already, more people are asking that question than tuned in to find out who shot J.R. on Dallas. The lineup of suspects is long, but it ends with Barack Obama, the triggerman who killed the buck.

The first wound came from Franklin Delano Roosevelt, who expanded the Federal government’s influence far beyond what the writers of the Constitution ever imagined. He devalued the price of gold and made it impossible for ordinary Americans to convert currency to bullion. But FDR was also crucial during America’s World War II victory, a pivotal event that set the stage for America to become the world’s largest creditor and greatest superpower.

LBJ Chooses Guns And Butter

Another suspect is Democrat Lyndon B. Johnson. When I was in college studying economics, our professor made us read history. This seemed counterintuitive until we read about the guns-and-butter policies of the Johnson Administration.

And while Presidents George W. Bush and Barack Obama make Johnson look like a penny-pincher, Johnson was the first to take a shot at the dollar.

Johnson pressed forward his vision with major spending programs for education, medical care, crime and transportation. He wanted to transform America the way FDR had. And he had a war to fight in Vietnam.

Gold demand rose, creating a drawdown on America’s gold reserves. The root of it all was a growing trade deficit that the United States owed to the rest of the world.

The Administration of John F. Kennedy knew America’s gold standard was in trouble. In January 1961, Kennedy’s Undersecretary of the Treasury, Robert Roosa, suggested the U.S. and Europe pool their gold to prevent a private marketplace for gold in which the price would exceed the mandated price of $35 per ounce. French President Charles de Gaulle reneged on the deal and began to redeem dollars for gold instead of U.S. Treasuries. The drain on U.S. gold became severe.

The 1960s marked a gigantic increase in Federal spending. Johnson’s two-front war was being fought at a prohibitive cost. In 1968, for the first time since 1893, the United States ran a deficit in its balance of trade. Federal debt began to soar. By the end of the 1960s, the U.S. faced the stark choice of eliminating trade deficits or devaluing the dollar.

Gold On Nixon’s Enemies List

On Aug. 15, 1971, President Richard Nixon cut the final link between gold and the dollar. Other nations could no longer redeem rapidly depreciating greenbacks for bullion.

In February 1973, the world’s currencies “floated.” By the end of 1974, the price of gold had soared from $35 to $195 an ounce. The U.S. could suddenly pump dollars without constraint. It was a period during which red flags were being raised for paper investors, few of whom paid any notice.

The majority of investors would pay a steep price for their ignorance. Over the next decade, they suffered through the worst bear market in stocks since the Great Depression and the worst bond market of the 20th century.

A Democrat Gives The Dollar A Reprieve

It is ironic that another Democrat would breathe life into the buck, but that is what President Bill Clinton did.

During the Clinton Administration — with the help of innovative accounting — the dollar stormed back. The disgrace Clinton brought to the Oval Office over the Monica Lewinsky affair seems almost forgivable since his Administration presided over a growing economy and what underpinned it, a strong dollar. More than a decade ago, the world had confidence in the U.S. dollar.

If you do not believe me, check the chart below.

 

Trade Weighted Exchange Index

As you can see, the greenback has been experiencing an unprecedented decline since 2001. No doubt much of the weakness in the dollar was caused by another guns-and-butter President: George W. Bush.

Just 2½ years into office, Obama is pushing the value of the dollar even lower. It’s so low that the value of the U.S. dollar now threatens to undermine our future and our children’s future.

 

To read the rest of the article go here:

http://www.personalliberty.com/conservative-politics/government/who-shot-the-dollar/?eiid=&rmid=2011_06_15_PLA_[P11408439]&rrid=394822321

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