An Invisible Tax on the U.S. Taxpayer

Did you know that you're paying a tax that you may be unaware of? Well, you are. This tax is an invisible tax in the form of a declining US dollar. As of May 8, 2014, the US dollar is now at its lowest level since the financial crisis occurred back in 2008.

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As a consumer you may not realize it, but as the US dollar decreases in value, the cost of everything that you buy goes up. That's what you call real inflation, even though the government and the Federal Reserve refuse to acknowledge it.

The costs of beef, pork, and milk have risen to record highs, and so has milk. But don't worry; your 401K is rising because the stock markets are also at record highs. But how long do you think that will last?

Anyone who follows finance will remember that the Federal Reserve and the U.S. Treasury Department promised that they would do everything in their power to protect the US dollar. Now, I follow finances very closely, and I can tell you that neither entity has done little or nothing to follow through on their promise.

It almost seems as though the United States is in competition with China to see who can devalue their currency the fastest, and China seems to be winning the game. But, the United States is not far behind.

If the US economy was operating normally, a lower dollar would mean higher exports, but today, it seems that the only thing that the US is exporting is gold, and food such as grains and meat. On the other hand since China is winning the war you can actually see the consequences whenever, and wherever you shop. You've probably noticed that almost every item you pick up in a store is made in China.

If the US dollar declines much further, we could possibly see another financial crisis such as the one we suffered in 1998, and maybe even worse.

Another thing that you may have noticed is that when you read your savings account statement, you notice that the percent of interest you collect is around 0.006%. On the other hand if your credit card holder, the banks are charging anywhere from 18% to 24%.

Watching Janet Yellen, the new Federal Reserve Chairman, as she reported to the appropriate government committees, I learned that it will be almost 6 more years before they clear their balance sheets of the excess money that they been printing for the last four years, and that's not counting interest.

If Ms. Yellen is correct, by the time they do clear the balance sheet, the United States might just be considered a Third World nation. And, if you think that can't happen here, consider this: the United States has gone from the largest creditor nation in the world to a debtor nation in six short years.

After all, although article 1 section 8 of the U.S. Constitution states:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

The key words here are "provide for the common defense and general welfare of the United States". But, it seems to me that those in Congress either have not read the US Constitution, or they choose to ignore it. They could be taxing Chinese goods to balance trade, and they certainly could stop borrowing money via the printing press, that we can no longer afford to pay back.

So, it's up to you, the citizens of the United States, to keep an eye on what the government is doing, and write letters to your Congressman and Senators, and even the news media if necessary, demanding that they keep their promise, and start doing something about not only protecting the dollar, but increasing its value and returning it to its prominent position as a world currency.