http://www.washingtontimes.com/news/2014/jan/12/coryn-and-brady-a-centennial-checkup-for-the-dolla/?page=all
Since the housing market crash of 2008, it's plain to see that Wall Street has more than recovered from the greatest economic downturn our nation has seen since the Great Depression. With the Dow Jones at an all-time high and stock prices climbing higher and higher, you might be tempted to think that the recession is over. But the truth is that the middle class has still not fully recovered from the recession, and the Federal Reserve's current policies regarding inflation and economic growth have not helped. This article describes how inflation has resulted in a devaluation of the dollar globally, which has had deep effects on American consumer's pocketbooks.
Over the past decade, the U.S. Dollar has been on a downward trend on the global currency market. This downward trend has had global implications, particularly the loss of buying power for the U.S. Dollar in international commerce. Simply put, when the value of the dollar against other currency falls, the price of foreign goods will rise. This affects the price of all kinds of products which are imported to the U.S., like gasoline. While the author does admit that the recent European financial crisis has helped increase the value of the dollar, the Federal Reserve still must be wary of promoting too much inflation for this reason.
In my opinion, there is little the Federal Reserve can do at the moment to shrink unemployment and stimulate real growth in the economy, as many businesses are still not confident enough in the economy to hire new workers. Perhaps that will start to change this year, but until then it may be a good idea for the Fed to lay low for a while.
In all honesty though, have we really seen that much of a difference within the past five years in terms of inflation? I don't think that the inflation is near as serious of a problem as you are making it seem. Of course, you tend to be more well versed on political topics than I do, but from personal experience, the value of the dollar has seemed pretty consistent to me within the past few years. Obviously hyperinflation is something every country should be wary of, but I do believe we have bigger concerns at the moment.
ReplyDeleteI agree with Lindsay that hyperinflation is not the biggest of our worries right now. I hope that the Federal Reserve is smart enough to know just how far they can push the inflation rate before anything bad happens to the middle class.
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