This quote was taken from one of the many newsletters I read.
It appeared in the Australian newsletter, “The Privateer”:
“In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That’s a cost of about $11,675 per capita.”
Amazing how a simple quote can give perspective. Even in inflation adjusted dollars, our country is spending irrational amounts of money, money quickly being devalued by the money printing presses stuck in overdrive, backed by nothing more than the future production of our children and grandchildren.
Begs the question: If we’re spending 1,297% more per capita than we did 100 years ago to govern, are we that much better off?
I think not.
Neither does the rest of the world judging by the markets reaction to the US Dollar. As you can see from the chart below, the US Dollar reached yearly lows last week. While I expect there could be a recovery in the dollar soon, I believe that recovery will be a bear market rally with the ultimate direction of the US Dollar continuing downward.
When reviewing the chart of the dollar index below, notice how quickly the dollar fell last week. A clear ‘no confidence’ vote by the rest of the world in my opinion.
If this continues, sadly, the future won’t be here.
This relatively new dynamic in the marketplace may make successful portfolio management and wealth protection more difficult, with more to consider and monitor; certainly hedging the dollar may be an important consideration when designing wealth management plans.
To obtain a copy of my latest market update click here www.usawealthmanagement.com
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