Its Official: The Dollar Index Has Hit An All Time Low

While you may not find any news agencies reporting this; the widely measured US dollar index hit an all time low against 6 other major currencies today and continues to fall rapidly. Even the tame inflation report that came out today had no effect on slowing the rapid decent of the Dollar versus other major currencies. As stated previously, the last time the Dollar had been near these lows was in 1992 when the Economy was just coming out of recession. After 1992 the dollar managed to climb all the way to 92 in November of 2005.

The index now sits at 77.92, over a 15% fall in less than 2 years. This has drastic effects for the average consumer and the economy as a whole, specifically rampant inflation and a lower purchasing power for foreign goods. This also makes US treasuries less attractive to foreign investors which in turn lowers our ability to pay off our government overspending by increasing our debt. Eventually foreign countries will not want to purchase an investment that is being debased by US policy. Its the equivalent of a Company printing more stock shares and putting them on the market, this then lowers the value of every share held and eventually no one wants to buy the diluted paper.

As a reference and for the chart of the day, I give you again the US dollar Index provided by ino.com: