Subprime Blogger
October 19, 2009

In February of 2009 Ron Paul warned of a US Dollar collapse when China stops buying out debt in this video (below). There are many good points that Mr. Paul points out in the video but none were more prophetic then calling for the dollar bubble to burst. When the video was recorded the US Dollar index was around 86. Today the US Dollar Index is currently at 75.5.

Another ironic fact about this video is that shortly after this video was recorded President Obama went on 60 Minutes and made the statement that “the dollar is still strong.” Unfortunately the dollar was not strong and we have seen that as a 10% drop has happened since the president’s statement. For those of you wondering why the value of the dollar continues to decline it is truly supply and demand.

The Federal Reserve Bank continues to print money at will. The billions of dollars that have been created out of thin air because of the stimulus package are only decreasing the value of the dollar. Not only is the value of the dollar decreasing, the Federal Reserve Bank is causing people to do things that they normally would not do. With extremely low interest rates people are going to buy homes. There is no problem with people buying homes except that many of these home buyers cannot truly afford homes. For reference to this take a look at the subprime mortgage crisis.

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