The political issue of the strength of our currency is coming down the pike. I’ve been a lone wolf on this issue for a while and finally — finally — some news organizations are starting to notice that our prolonged insistence on nearly non-existent interest on government debt, and massive-deficit-spending ways, have made the dollars worth less than they have been in more than a century.
This will be a political issue in the upcoming political cycle — and, ironically enough for me, Sarah Palin appears to be the first Republican to be picking up on it. The upcoming j’accuse in the 2012 Presidential debate will be: “You’ve made our money worthless!” (It won’t matter that the process started under President Bush; this is politics we’re talking about here and by 2012, George W. Bush will be a historical figure.) The Democrats will not have the ability to stop deficit spending in any meaningful way, but they could in theory induce the Fed to raise interest rates on government debt, so the Administration could, in theory, do something to mitigate the problem.
But I predict that they will not. Weak dollars will be the order of the day and an issue in 2012. You read it here first. This time, you really did.