How devaluing of my money affects me

How devaluing of my money affects me March 16, 2008

Posted by BDO in Descriptions.
Tags: affect, Debt, devalue, government, market, money, stock
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Devalue Money

This week we saw a huge increase in the value of the stock market. The Dow Industrials went up over 415 points to set a new short term record. Excited stock owners every where believed the slowing economy would jump start into overdrive again. But it did not. The exuberance of the direction of the stock market was short lived. Today the stock market is heading in the same downward direction.

The reason the stock market came back down was because the real reason it went up was based on false hopes. It was interesting to see that there were only a few articles in the media about the reason the stock market went up. For those that are trying to beat debt, it should concern us that the Federal Reserve took measures to take on more debt for the country. I don’t know why these articles didn’t make it into the main stream media. It is very important for everyone to understand that when the government takes out more loans, our money that we hold in our hands devalues.

Right now our money is devaluing at an alarming rate. Back in the day, this might not affect me, because most things were “Made in America“. If my money went down in value, the products I bought matched the devaluing. But we are a service economy now, so we don’t make many products. Most of the products on the shelves that I want to buy are made somewhere else. With my money devaluing that makes the prices of the other country’s products more expensive.

What can I do when my government takes out more loans that it can not pay back and causes me to lower my purchasing power? I can find an American version of the product (which hopefully will be cheaper and of the same quality), find an alternative product, or buy the product and cinch my belt a little tighter in other parts of my finances.

The more the government takes on loans, thus devaluing my money, the less I can purchase in the marketplace and the lower my quality of life will be. If I am committed to beating debt, I am also “spending” more to pay back debts. This would make it tougher to pay back debts.
The more the government goes into debt, the tougher its people have to pay back their own debts.