Honey, I shrunk the dollar

Every which way, but (especially) loose

By Morf Morford, Tacoma Daily Index

I’ve been following the ups and downs of the dollar for a long time. I’ve never seen anything even remotely like this; at home, the US dollar buys far less than it did even six months ago. But, compared to other currencies, it is worth more, sometimes far more than it has been worth for years. Or decades. Or ever.

Currencies change on a daily (or even hourly) basis, but as I write this, the US dollar is worth about $1.30 Canadian. And the US dollar is worth a shade more than the Euro. But at the grocery store or the gas station the dollar in my hand seems to shrink every day.

Various currencies and precious metals (and a constellation of cyber-currencies) may rise and fall, but they all do so in relation to the US dollar.

What used to be called “pocket-book” issues, as in what we encounter on a daily basis, have come to define how we think about our relationships, our careers and, of course, our larger political and cultural climate.

In any other election year, we would vote on these “pocket-book” issues.

But which party has our best interests as their focus?

Finger pointing and histrionic noise seems like the most we can get from most politicians these days.

Maybe we need some boring old-style administrators at the helm of companies and political campaigns.

Meet me at the “flation”

If you watch or listen to any of the business or financial talking heads, you’ll see that even they grasp for words to explain where we are.

Inflation, Stagflation, dis-inflation, even Shrink-flation (the ever shrinking size of packaging for products which do not change in price) we all struggle not only to rearrange our budgets, but to understand or attempt to explain our status – or direction.

There was a time when we had political parties vying for the right to proclaim themselves the most frugal and economically responsible.

We used to have at least one political party that vigorously opposed government “intrusion” in our personal lives and decisions, but that too seems like a relic from a distant and innocent, if not fantastical, past.

Show me the money

You may have noticed, that for most of us, our income has, at best, remained relatively stable, while prices have expanded – sometimes dramatically.

On paper, we have more millionaires – and billionaires – than ever before.

If we have equity in a home, there are few among us with less than a million dollars in personal assets. Debt level – and interest rates – tell a very different story.

Almost everything takes more dollars than it did – even a few months ago. Expenses and costs accumulate and those incidental (or even not-so- incidental) fees and charges can cause our once-considered-sufficient savings to evaporate when we aren’t looking.

Some investments gain in value, but few grow faster than the rate at which the value of a dollar is falling.

It’s not, of course, just that items are more expensive (though of course they are) but that the value behind each dollar is shifting – even sinking.

Besides more millionaires, we also have vastly more who are disconnected from productive lives or careers.

Whether homeless or addicted or distracted and disaffected, the divide, cultural, political and economic, is growing by the day.

The “great resignation,” “quiet quitting” and ever present “help wanted” signs are not indicators of a healthy economy.

Increasing costs and stagnating, if not declining assets and disposable income mean ultimately only one thing – an economic cliff is somewhere on the horizon.

Few are expecting anything resembling the 2008-09 recession – but some are projecting something worse.

Wide scale individual mortgage foreclosures are almost a certainty.

Retailers, even the biggest of the big box stores are in trouble. Online and brick and mortar stores are seeing their sales dry up. Most consumers have far less in their wallets and have focused their budgets on essentials.

And, to use a famous roulette phrase, where it stops, nobody knows.

And it’s not just us

The United Kingdom is expecting an inflation rate of just under 20% – just since last year. The Chinese yuan is at record lows against the US dollar.

Cyber-currencies waver or crash and even gold and silver seem to have stalled.

The stock market is a fool’s game for the time being.

What anyone should or would want to do is up for grabs as never before. What asset will hold its value has become the ultimate question – if not quixotic pursuit.

In investment circles, there has been the enduring legend of the “October surprise”. Perhaps the real surprise will be the return of a stable economy.


You can track the real time swings of the dollar against a variety of major currencies here – https://www.tradingview.com/symbols/TVC-DXY/.