Please forgive me if I get a bit perturbed with all the "sky is falling" articles in the financial press and on financial internet sites predicting the doom of the dollar and the U.S. economy.

Sometimes, I think that if I see one more article about how the U.S. consumer is about to go down the tubes forever, or how the euro is about to spell the forever end of the dollar, or how the coming unstoppable, apocalyptic inflation disaster in the U.S. means the final end to America's huge, unprecedented economic engine, I think I will - well, you fill-in-the-blank yourself with various physical events.

Look, no one disputes that the world is a really tough economic taskmaster. And no one disputes that there are economic imbalances continually cropping up somewhere in someone's economy, or that the economic imbalances in our own economy will require financial innovation and discipline to solve.

But, let's get real here, as they say. America is still, by far, the largest, single most powerful economic entity the world has ever seen. It is the most resilient, the most dynamic, and most aggressive developer of just about everything, also.

How do you think that happened? Were we just lucky? Did we somehow cheat to become as powerful as we are? Did we use force of arms? Obviously, no!

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We got here by establishing a free people, a free marketplace, and a society that really tolerates just about every custom and way of life that exists or ever has existed on this planet and encourages its citizens to be risk takers with the promise of potentially huge financial rewards for their efforts.

Now, don't get me wrong, my Vent this week isn't meant to beat the drum of how great we are as a people nor is it meant to be some nationalistic diatribe. What I have to say goes to the heart of the matter we face internationally and it is this:

[Editor's Note:Bernanke Reveals `Fiscal Crisis` Ahead]

We are the most envied country on earth. Millions every day risk their very lives to get into our country illegally. Many others just steal, cheat, and lie in an attempt to suck us dry of our hard-earned valuable ideas and methods of doing business. And, of course, some just try to harm us by violent means that they believe, in some distorted way, will make them the ultimate rulers of all others.

I could literally choose from dozens of specific topics about our economy to illustrate my point in this week's Vent and could fill hundreds of pages of commentary doing it (but, never did like to write books).

But, in the two and a half pages allotted to me today, I have chosen, as my first sentence indicates, to focus on just one area, namely the dollar — like in the dollar, yen, ruble, mark, peso, franc, and so on. And here is why.

The dollar has been the envy of the world for decades. It has been maligned, abused, denounced, and, yes, wanted more than any other country's currency in history. And in the last 20-plus years, mostly with our passive consent, it has been under unprecedented attack. Many countries have used our currency to suck our valuable national treasures away from us.

Let's talk a bit of basic principle here. (Yes, I am going to talk about the A-B-C's of money for a minute, but stick with me here!) Because we are the world's largest and most wealthy country, other countries have used the tool of "PEGGING" their currency's value just below or, in some egregious cases, way below our currency's perceived value (like the worst offender of them all, China), so that our incredible economic engine can not compete with their economic engine.

Using sweat shop labor (can really name many here, but will name China — again), they produce products at a price that makes it economically advantageous for the U.S. consumer to buy their products and not our own homegrown, home produced products. (Never let it be said the U.S. consumer doesn't know and like a good deal when they see one.).

By doing so, they slow or even shut down output from our manufacturing entities, seduce our people into reliance on their products, and drain dollars from our economy that would otherwise have remained here and helped build our economy into an even larger and more valuable national treasure entity.

But, as I said, we as a country have, for the most part of 20+ years, sat passively by and just let this imbalance continue. That is, until the last few years. In the last four years, in my view, there has been put into place a carefully crafted counterattack.

You see little fanfare about this retaliation. There has hardly been a note in the press (until just recently) about what I believe is a carefully thought out and quietly applied economic policy to take back our treasure. (Interestingly, it seems to have started just about the time that Dr. Ben Bernanke became special advisor to the President - before he became the Chairman of the Federal Reserve. But, more on him in a minute.)

[Editor's Note:4 Foreign Currency Plays to Beat the Falling Dollar. ]

You see, the best way to handle thieves is to make it unprofitable for them to steal something. Back when copper was only $1.50 a pound (that's quite a while ago, granted) copper was not on the list of any crook as something worth stealing. But, today, they strip drain pipes, wiring and just about anything else copper from homes, office buildings, etc. and sell it to willing (but often unsavory) buyers.

Now, if copper fell again to the $1.50 level, the thieves would quickly lose sight of it on their radar and gravitate elsewhere to better pickings. Of course, another incentive to go elsewhere would be an aggressive pursuit of the thieves by the authorities making the risk of gain not worth the penalty of getting caught.

I firmly believe that both low value (think the dollar) and aggressive enforcement (think Congressional actions) are in place today working to reverse the drain on our national wealth that unfair currency "pegging" has caused us.

In my opinion, however, by far the most powerful tool in this policy is letting the U.S. dollar fall IN RELATION TO OTHER CURRENCIES! Understand this. Value is always in the eye of the beholder. Since hard asset standards have been left behind by all the world's economies (gold, etc.) for the first time in history (beginning primarily in 1976 when the U.S. went off the "gold standard,") this "perception of value" is the only backing of a country's currency. Perception is the "standard" today.

Now look, you don't have to be a rocket scientist to understand that we don't have fewer natural resources if the dollar declines. Nor do we have less plant and equipment in place if the dollar goes lower. And we certainly don't have less labor talent or creative talent if the dollar is lower. All that happens is that we just become more competitive and have a stronger opportunity to compete in all the world's markets.

It is our falling dollar that forces the "peggers" to live with reduced profits or, even worse, real losses. Their ability to compete with us fades. The bigger the losses they suffer, the faster they (just like any thief) are coming to the realization that they are now the ones losing national treasure.

You see, our goods and services are becoming more attractive to buy than theirs worldwide. Our entrepreneurs are finding they need more workers to make things. They need more plant and equipment to produce things. They need more capital to produce things.

And, as a country, we suddenly are beginning to find we have the ability to supply all these elements to make things right here in the good old USA. Now, instead of importing things to meet our needs, our own economic engine is beginning to supply our needs at a better price than any imported goods and suddenly our national treasure is actually growing! Slowly so far, to be sure, but it is beginning to happen!! OK, so much for the lesson in currency economics.

Here is the bottom line. I believe our economists are, for the most part, completely missing the boat here.

In the old days, they taught that a lower dollar meant a short term gain in productivity and exports for our economy. But, over the longer term, a loss in U.S. consumer purchasing power emerged as imported goods cost more and more local dollars chased fewer local goods in our economy (they were being diverted to exports).

In other words, inflation flourished, a not so nice longer term outcome. But, today, it is my contention that the "globalization" of the world's economy, an interdependence that never before existed, has reduced this danger, possibly even wiped it out completely!

If you need an example, how's this one? How about China hugely devaluing its currency by pegging it at 40 percent below the dollar 13 years ago. And don't give me "that was a special case." stuff. It was a carefully planned event. Their experience proves a planned devaluation can work well and inflation is not the outcome.

Just ask Dr. Ben Bernanke, the current Fed Chairman. He has written a book with the same contention! Remember we mentioned him above? I believe he is the one that got this devaluation ball rolling three or four years ago as advisor to the President and today this strategy is finally getting everyone's attention. (But sadly, most economists continue to use the "old measuring standards" to look at this new strategy and thus are reading it all wrong.)

Today, the USA, with its huge and talented labor pool, plus a huge and growing plant and equipment base, and a huge growing financial tool called "money supply" (again, thank Dr. Ben), finds its shops and factories are demonstrating a new and competitive stature worldwide and at the same time beginning to supply our own needs with low priced, home-grow, home-produced goods and services - filling the gap caused by higher priced imported goods.

[Editor's Note:Buffett, Soros, Templeton, Rogers: Learn Their Money-Making Secrets]

But, of course, because of our growing competitive stature you are also hearing from abroad the cry of "unfair" or "you better back off or we will really make things tough for you" (China's favorite line in this growing din). Baloney I say!!

I have said four times so far today (this one makes it five) that we are the world's biggest economic engine by far! And get out of here with your talk of the EU. They can't even get together on how to set economic policy what with each member of the EU still so very nationalistic and protective of its own interests.

Theirs is a very loose economic union. For heavens sakes, their Euro is so brittle, that many euro countries are now printing what they call "regional" currencies to compete with the Euro.

And if that isn't evidence enough, they can't even work together on a simple national budget. It winds up being just an exercise in futility. Do you think that real "big time" investors are going to run to them as an economic savior? Again, baloney!! Forget it!!

And - surprise, surprise - there is China threatening to "sell all it dollars and ruin us!" Baloney again!!

The global economy makes them a marginal player regardless of what Wall Street tries to say. China could sell every dollar of ours that they have and, while it would roil markets for a few weeks, it would be business as usual very quickly. There is a huge pool of buyers out there of our currency and bonds. Believe it!! These markets trade in trillions every day as a regular habit!

Truth is that China's central control structure is its own worst enemy. Just ask any Chinese businessman or woman. It stifles innovation, free entrepreneurial thinking, and promotes corruption in high places.

And Dr. Bernanke is well aware of the power of our vast economy and its powerful currency in relation to others in the world. He is not the least bit phased by a lower dollar. And expect him to lower interest rates, as well as the dollar, to attract more investment to our country (read, for example Toyota) and a more competitive stance in the world markets because he does grasp this understanding.

He will see to it that the U.S. money supply is well more than just adequate to remedy the so-called "sub-prime" housing mortgage problem. So, put that problem to rest in your thought. And his aggressive stance on money supply will also provide the funds for needed new capital investment. He has great faith in and will rely on the already re-awakening American business sector to quickly take advantage of using the lower dollar to bring lost national treasure back to the U.S. In my view, it's about time!!

So, forget the "sky is falling" diatribes. Look at the true picture being written by the stock market. Until July 2006, our stock market floundered for a number of reasons and the averages reflected it. But, from that date we have seen a growth in stock values that is almost historically unprecedented (note that Dr. Ben took over the Fed just three months before the huge rally began - coincidence? Don't think so).

I truly believe it is Dr. Bernanke that has set off this huge expansion. Big money sees that he is not relying on the old fashioned ideas of using the sledgehammer of interest rates to kill a bit of economic over-stimulation, or using endless strings of fancy words to accomplish deeds (sorry about that Mr.Greenspan, but if the shirt fit, wear it).

Instead, Dr. Ben is turning to the more reliable and manageable tools of money supply and financial actions worldwide to gun the engine of our economy. READ HIS BOOK! IT IS ALL THERE!

Ok, so does Dr. Ben know everything? No, no one does. Will he make mistakes? Probably, we all do. But, understanding the future the way Dr. Ben does brings to mind great thinkers like General George Marshall's rebuilding of Europe and Ronald Reagan's "Supply Side" economics. Early on, their actions became the magnet of ridicule and derision, that is until time proves them right.

When the insight of men and women like them is finally seen, there is ultimately no one left to ridicule the prophet's vision. Big money can see that the insightful vision of Dr. Bernanke is already being recognized by our economic adversaries and big money really likes the tables being turn - finally!

Maybe you should be getting on the lower dollar train yourself. But, be careful of the "old school" currency thinkers. They might get you off on the wrong siding and you will be left at the station (if you will allow me license to carry the train analogy a bit too far.)

Well, that Vent helped me a lot this week. Always does, it seems. Feel better every time. So, my parting words to you are, as always, hope you have a great investment week. In the meantime, you keep in touch, I do!! See you next week.

Editor's note:
Bernanke Reveals `Fiscal Crisis` Ahead
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