The U.S. Dollar’s “Hidden Tax” Could Spell Disaster for Your Wealth

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steven mnuchin endorses weak dollar and hidden tax

From Birch Gold Group
For over a year now, the U.S. dollar has experienced a steady, continuous decline in value.
It’s partly because that’s the stated desire of many within the White House, who may very well be playing a shell game of sorts. You see, right now, the U.S. economy is projecting several signs of strength — at least according to many mainstream metrics. But this “shell game misdirect” might be coming at the expense of the dollar.
Treasury Secretary Steven Mnuchin has even endorsed the dollar’s recent decline, going so far as to essentially say that it’s part of the plan. That’s because, as he sees it, a weaker dollar would benefit the American economy, as it will be beneficial for trade opportunities. It’s part of the Trump Administration’s plan to focus on “America First” exporters and propose a more anti-global trade initiative.
With that in mind, it would be wise for you to keep an eye on the movements of the dollar.
Especially since…

Mnuchin is Wrong, and the Result is a “Hidden Tax” for You

In a previous article we showed how tighter trade policies could speed up the dollar’s demise. The result of those policies is now starting to play out.
It’s even gotten the attention of billionaires like Ray Dalio, Co-Chairman of Bridgewater Associates. He said that Mnuchin’s endorsement of a weaker dollar is “not what the economy needs right now.”

… it is a hidden tax on people who are holding dollar-denominated assets and a benefit to those who have dollar-denominated liabilities.

Dalio also said that there will be a correction…

… rebalancings should be expected over time, especially when U.S. dollar bonds look unattractive and trade tensions with dollar creditors intensify.

That correction could be starting now….
On January 10, China announced that they are now viewing U.S. Treasuries as less attractive, saying that they may start to slow purchase, if not halt them altogether.
Further, for over the past year, the dollar has taken a major hit. And then the Fed raised rates this past December, contributing to the dollar starting this year off in the worst state since 2003, with the Dollar index down 2.43%.
The index also dropped below 90 for the first time since 2014, and isn’t showing signs of recovering since the Fed rate hike.
All of this is just the beginning. The dollar is tied directly to the Asian trade news and speculation that Trump might tighten trade restrictions even further…

“While at this stage Trump’s protectionist rhetoric is being applied sparingly and not drawing a reaction from China, there is the threat of Trump ramping up protectionism,” said David Forrester.

Despite this troubling revelation, there could be good news on the horizon for savvy investors…

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How to Protect Yourself (and Gain) From this “Hidden Tax”

If things keep going as they have, this “hidden tax” from a weakening dollar could be hedged by moving some assets into precious metals like gold.
Gold has been on a sharp rise as of late, rising from $1,248 last December to its current level around $1,350.
That trend seems to be following right along with the big hit the dollar has taken since.
Precious metals are historically proven to appreciate in value whenever the dollar falls. Plus, they can offer you protection against adverse events like the real possibility of the dollar crashing this year.
When it finally happens, you can expect reactive buyers to begin snatching up metals fast, which instantly drives up prices. That trend could be starting right now, so don’t wait for the dollar to crash before protecting your wealth with precious metals.

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7 thoughts on “The U.S. Dollar’s “Hidden Tax” Could Spell Disaster for Your Wealth

  1. Higher long term rates in the US will definitely strengthen the dollar all other variables being equal. Rising interest rates should also decrease, not increase, the price of gold relative to the dollar. Probably, the most advisable course for policy is a stable dollar. Even with interest rates rising, businesses and consumers should have stable prices on which to plan. Solving the long term trade imbalances include 2 elements: first, addressing the huge fiscal deficits, and two actually competing on the world stage against European and Asia companies with some sort of industrial policy. Unfortunately for the US for the last 28 years, it has been more focused on wasting money on fighting illegal wars.
    ‘In an article published in Asia & the Pacific Policy Studies, economist Ralph W. Huenemann explains:
    “In 2016, the American government budgets carried a fiscal deficit of $865 billion, and the balance of payments showed a trade deficit of $521 billion.  A surplus of private savings (including substantial retained corporate profits) of about $344 billion over investment partially offset the budget deficit, but as long as there is such a massive deficit on government budgets, the net inflow of imports will continue.  This is inherent in the nature of national income.  No President can change this reality without tackling the government budget deficit.”’ Zero Hedge

  2. Sure ,,,, push up the value of the dollar & watch exports collapse … and with raising interest rates your debt burden shoots up …….. USA is screwed and Trump is a moron.
    Seven skinny cows eating seven FAT cows …… is Anyone CONSERVATIVE left in America?
    This year the BANKSTERS take $276.2 billion from you as “interest” on just the National Debt. Here is the Debt Clock – http://www.usdebtclock.org/ — you can watch it real time. This is at a time of historically low rates ….. what happens when rates go up? Trump is INCREASING the debt, and thus the interest payments at a time of increasing interest rates. You pay your debts off when times are good ….. remember the 7 skinny cows eating the 7 fat cows???
    Keep digging — http://investmentwatchblog.com/credit-card-payments-and-subprime-auto-defaults-are-soaring-holiday-spending-set-to-hit-12-year-high-thanks-to-debt/
    Get some FACTS straight …. the DOW, NASDAQ, & S&P are hitting all time highs. Unemployment is supposed to be at all time LOWS. We are supposedly having a glorious upsurge in the economy, If we do not pay off the debt NOW when will we? All this glorious economic news and we still have DEFICITS?! Why do you have to “cut taxes for the already rich” so they will supposedly be inspired to create more jobs …… when everybody is supposedly employed???!! And the true job creation is proven to be by Small Business and financed by Middle Class spending, NOT by millionaires.
    “the tax cut is an exercise in willful blindness. The same no doubt could be said for the 1981 Reagan tax cuts, which predictably led to unprecedented deficits when Republicans as well as Democrats balked at making offsetting budget cuts. Yet at the time a whole band of officials in the White House and the Congress clamored, in some cases desperately, for such reductions. They accepted a realm of objective reality that existed separately from their own wishes. But in 2017, when the Congressional Budget Office and other neutral arbiters concluded that the tax cuts would not begin to pay for themselves, the White House and congressional leaders simply dismissed the forecasts as too gloomy.” http://www.zerohedge.com/news/2017-12-25/us-has-reached-last-stage-collapse
    “Alas, all you suckers out there are , like this writer, a few paychecks away from financial uncertainty. The less than one thousand dollars extra per year that this bill will throw you is nothing compared to the mega millions the super rich and the large corporations will see added to their spreadsheets. https://www.globalresearch.ca/must-be-the-season-of-the-rich/5623913
    Whilst the elite owns most of the assets, ordinary people own the debt. Not just their own debt but also the public debt burden which irresponsible governments have built up, including unfunded liabilities such as pension and medical care. And when the financial system fails, ordinary people will suffer the most.
    “USA is ‘out of whack’ with the rest of the world” ???? USA is fighting and PAYING for most of the WARS. Make those other countries pay for the wars and watch their tax rates rise. Better yet …. STOP the wars we are in. We are losing them anyway ……………
    We should be raising taxes. If these Billionaires had to pay a proportionate amount equal to the benefit they derive from Us protecting Their money, property, LIVES …….. they would take an interest in getting a GOOD government not just one that serves their immediate interests …. They would insist on ending corruption and waste and balancing the books. People whine there is no such thing as “fair” taxes ,,,,, but there is . The Workers pay with blood & money for ONE house with a mortgage to the BANKSTERS ….. counting all they pay for state, local, sales, federal taxes 1/3 of their gross. The Billionaires whine they need tax cuts “to create jobs” and NEVER SERVE in uniform so they never get PTSD, amputations, maimed or die.
    TAKE 60% of their gross because they own multiple homes with NO mortgages.
    It is past time these Billionaires & mega-corporations PAY for the wars from which they profit and which protect them. Either PAY for the wars, or we put your Boards of Directors in the Front Lines to BLEED with us working stiffs. You want to move your corporation, OUR JOBS, to another country to dodge taxes here? So WE have to pay for your wars? Over YOUR DEAD BODIES. The U.S. has intervened militarily and covertly in so many nations it is impossible to recount them all but in every case the American military is protecting some investments of value to American corporations, or a strategic position or both.
    Those who benefit the most should contribute a proportionate share.
    Amazing that all these leftwing tech billionaires do not want to share THEIR wealth. They always talk left wing “communalism” but they clutch their money like it is life itself ….Even when they “give” charity it is through THEIR trusts &foundations that THEY control and reapTAX BENEFITS FROM. Even though They are always eager to spread YOUR money around……
    Time for the 1% to contribute PROPORTIONALLY to the War Efforts. Much is expected from those to whom much is given.
    Some of our Troops give ALL, or are maimed for life,and the 1% balks at giving MONEY when they have so much?!
    Cut taxes for the “Rich” so they will invest their money in creating more jobs? By that logic giving ALL your money to the Rich would make Everyone rich. Humanity already tried that. It was called FEUDALISM, a primitive form of COMMUNISM.

    • “If we do not pay off the debt NOW when will we?”
      While you make several very good points you must understand without changing our Monetary System: which I favor, there can be NO REDUCTION in DEBT without a corresponding reduction of our money supply, The continuous bubble we have been in for decades has been based on DEBT. In the back rooms they justify all the new debt by saying “We must grow the money supply.”
      But we need not worry about all this theory. World Debt has about reached the point where it is going to collapse on its own accord and we will get a new money system and a whole LOT of other things MOST most unwelcome.

        • Thanks.
          In 1913 when the FED replaced GOLD with PAPER as the backing for our Monetary System they KNEW it would work for decades as the GOLD was slowly replaced with PAPER. They knew it would FAIL catastrophically when it did finally fail and bring on a MONETARY CRISIS for the USA.
          IMO this was all PLANNED way back in the 1880s when the planning for the “Banking Crises” that helped foist the FED on us was being formulated. They did not know when but they did know WHAT.
          As much as I hate the FED and the corrupt Rothschild Clan behind it you have to admit this evil plan coupled with a similar Planned Destruction of our Fiscal System did work beyond well; IF your objective was to destroy the USA.

          • Yes ….but WE have to live with the result. Constantinople lasted 800 years, tried inflation ONE time and never did again …..
            Eternal damnation to those behind this.

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