Yeah, I know. Economics is a topic that causes people's eyes to glaze over. It's important though, and it is going to get ever more important in the days ahead. From Bloomberg:
"Pimco Says Dollar to Weaken as Reserve Status Erodes"
"Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar will weaken as the U.S. pumps “massive” amounts of money into the economy.
“While we have not yet reached the point where a new global reserve currency will arise, we are clearly seeing a loss of status for the U.S. dollar as a store of value even in the absence of a single viable alternative,” Mewbourne wrote."
In economics, as in physics, every action caused a reaction. Some of those reactions are good. A falling dollar means our exports are cheaper abroad. Others are more ominous. Imports-like crude oil for example-become more expensive. Worse, the devalued dollar will ultimately lead to hyper-inflation in America.
The sooner we come to grips with the fact that spending money we don't have is bad, the less pain we'll suffer getting our fiscal house back in order. Will we wise up now, or continue on with the attitude of our cartoon friend, Mr. Newman?
I fear the latter.