HIDDEN TAX

(Quoted from Moneynews.com newsletter)

Foreign Money Props U.S. Economy

Even as the Dow neared its all-time high this July of 14,000, it was really only worth 9,730!
It’s true, as the Europeans perceive the value.
The dollar has depreciated so dramatically in the past seven years that essentially Europeans are buying into the Dow and other U.S. capital markets at incredibly cheap prices.
Consider back in October 2000 when the dollar was at a high and the euro was worth just 82 cents for every greenback.
Since then — and largely due to massive inflation of the U.S. currency — the dollar has fallen some 39 percent. Today it takes $1.36 to buy a single euro.

WHAT THIS MEANS, in my view:
Assuming a steady drop of the dollar over seven years, there is a hidden, annual 7.5% tax on all purchases due to inflation.

VIZ: (1.36/.82) exp (1/7) – 1 = .0749 =>7.5% per year