THE U.S. DOLLAR'S TWO-STEP
A Long-Term View
by Michael W. Hodges, Author
Grandfather Economic Report
September 24, 2007

Devaluation of the dollar - - internally and internationally.
Should we expect differently than the past?

1.  U.S. Dollar devaluation of internal purchasing power:

Read more on the long-term CPI inflation chart here in the
Inflation Report at http://mwhodges.home.att.net/inflation.htm

Why should anyone think this historic internal dollar depreciation trend we call inflation will be otherwise in the future?

2.  U.S. Dollar devaluation of international purchasing power:

Read more on the long-term US dollar exchange rate chart here in the
Foreign Exchange Report at http://mwhodges.home.att.net/exchange_rate.htm

Why should anyone think this historic international dollar depreciation trend vs. foreign markets will be otherwise in the future?

We can always hope our dollar-based savings and assets will be under pinned by a stronger dollar, both domestically and internationally, in the future than in the past. But history, with such long-term negative trends in place, is a powerful teacher - - requiring uncommon "bravery" to bet against, wanting to believe that this time it will be different.

I can contemplate several likely outcomes, one of which is most scary.