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At a recent press conference President Barack Obama touted the current strength of U.S. dollar, which he said has come about “…because investors consider the United States the strongest economy in the world with the most stable political system in the world.”
The dollar has done fairly well since December 2007 – the official start date of the current recession. (See Chart 1 below). What President Obama failed to mention is that the dollar is well below where it was in 2002. 
Source: Board of Governors of the Federal Reserve System Fiat currencies sometimes are said to fare well relative to each other, but strong and weak are purely relative terms. All the currencies of the world today are fiat currencies—currencies that promise to pay nothing except more of the same currency. These world currencies have lost value over the years, as shown in Chart 2. Like elevators on the Titanic, some currencies are going up and some are going down, but all are sinking. Click here to view chart.
(Source: 2009 AIER Chart Book, Page 5)
The major factor that led to this situation is officially sponsored inflating as a means of restoring and perpetuating prosperity. In the U.S., the dollar has lost almost 95 percent of its purchasing power since officially sponsored inflation began over 70 years ago. The inflating continues unabated. Contrary to these currency trends, the purchasing power of gold has remained stable over the long-term (see Chart 2). Its value may fluctuate, but such fluctuations will tend to be self-correcting—low prices and a high purchasing power of gold increase the rewards of mine production and vice versa. Fiat currencies lack any of these self-correcting mechanisms. Paper money can be printed as fast as officials can run the presses, leading to inflation, or even hyperinflation. In Zimbabwe, for example, hyperinflation of 231 million percent has driven many to panning and digging for gold in order to survive. We’re not there yet—but we need to remember that third world policies lead to third world outcomes. The 2009 AIER Chart Book contains charts tracking the value of gold in comparison to major currencies and many other interesting visuals. The AIER Bookstore also sells posters that illustrate historical trends in the purchasing power of gold and the purchasing power of the dollar.
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People are more educated now about reckless printing of money, how our economy and government debt is secured by China, and that we are on a downward spiral that can be corrected by common sense measures.
Keep up the good work and continue to spread the message of fiscal responsibility so we can get this country and its "faith based" currency stable again.
(1) The Dow-Jones Industrial Average in current U$Dollars
(2) The exchange-rate of each of the major world currencies
(3) The current-U$Dollar per-barrel price of crude oil
(4) The current-U$Dollar price of a "reasonably-stable" market-basket of widely-used, staple commodities
NEW SUBJECT: The note at the bottom of Chart 2 mentions "implicit price deflator." Pray tell, can you explain that so that even I can grasp its meaning? Exactly, what are the implications?
(1) The Dow-Jones Industrial Average in current U$Dollars
(2) The exchange-rate of each of the major world currencies
(3) The current-U$Dollar per-barrel price of crude oil
(4) The current-U$Dollar price of a "reasonably-stable" market-basket of widely-used, staple commodities
NEW SUBJECT: The note at the bottom of Chart 2 mentions "implicit price deflator." Pray tell, can you explain that so that even I can grasp its meaning? Exactly, what are the implications?
You say that:
"Paper money can be printed as fast as officials can run the presses, leading to inflation, or even hyperinflation."
Well, even faster. Now with computers you just press a few kyes and...Bingo!! You create inflation.
Sorry I should not have said "inflation". I sould have said: "you inject liquidity into the system".
Government is no fool...most all taxes are progressive such as sales tax, income tax, etc...meaning purchasing power of tax revenue keeps up with inflation as the cost of goods increase so does the revenue...unfortunately not all of our investments do as well.
Amzingly we tend to go along with percentage increases in these progressive taxes...apparently not realizing that the reason they are raising the tax is because government is getting bigger and spending more of our money....
One day we will wake up and realize what they have done to us, our grand children,....our country.
Capt Rich