OK, I know why I pay taxes and even though I now live outside the country, I am thankful for still having a US passport and the privileges that come with it. However, with the announcement by the Treasury this week that it was going to buy up – I can´t remember how much – in T-notes, my dollar became worth significantly less; overnight.
The ¨printing¨ of money to do this diluted the dollar to something like a 24 year low. Living in Chile, I have seen the dollar drop 30 pesos. Since most of my money is in dollars, I have to think what the effect will be when I withdraw it here in Chile. So now, for every dollar I withdraw, I get 30 pesos less than six weeks ago. This does not sound like much until you think in real terms. So a breakdown. A bus ride one to or from town is 300 pesos. So I can now get one less bus ride for every $10 dollars I with draw. I withdraw one hundred dollars, that is a work week worth of bus rides I have just lost because of the low dollar. Let´s look at food. I can usually buy 3 days worth of fruits, vegetables and bread for about 3000 pesos. So now when I withdraw $100 dollars, I loose the buying power of 3 days worth of food.
So the actual numbers are: 1.15 trillion in treasuries and housing debt – wait, isn´t that like half the GDP? Oh who cares.
I have heard and read that in some circles there is the belief that inflation reduces debt. This simply is not true in any way that counts, so don´t start down this road either.
And all these services for my tax dollar, who would have thought you could get screwed for so little.