The Currency Fall Out

"Investors are worried..."  "Investors were also anxious..."  "Finance Minister tried to appease investors..." 

Interesting...all of these concerns were found in one article written about the possibility of a currency collapse facing one country.  Due to major uncertainty, investors immediately began pulling their money out of that country's economy causing the currency to lose substantial value in one day.  So the question is this:  "What do investors see that most of us don't see?" 

To put this into perspective, let's do a little math to explain how serious the situation is and what it means for you and I.  Due to massive investor-pullouts, India's currency (rupee) dropped a staggering 17% so far this year.  But you maybe saying "It's just 17%-what does that have to do with me?"  Allow me to show you in U.S. Dollars...

$1.00 multiplied by 17%= $.17; $1.00 minus $o.17 equals $0.83 cents of purchasing power
$20.00 multiplied by 17%=$3.40; $20.00 minus $3.40 equals $16.60 of purchasing power
$50.00 multiplied by 17%=$8.50; $50.00 minus $8.50 equals $41.50 of purchasing power

So what happens when your currency is 17% less than its face value?  INFLATION.  The 1 gallon of gas is still 1 gallon, but the price increase is due to the falling value of the currency.  So now, you need more "dollars" to purchase the same gallon of gas.  Do you now see what this has to do with you?

Here is a perfect illustration of how the U.S. Dollar has lost its purchasing power over the years and how it affects us.  Also watch "Hyperinflation Nation Part 2" to SEE "inflation in action" and how we need to prepare ourselves for it.

(Quote Source:  Wall Street Journal  http://online.wsj.com/article/SB10001424127887323407104579037991813071888.html)