The Dangerous Path of Printing Money

The Dangerous Path of Printing Money

Dateline 2008... The year's most significant event went almost unnoticed. We started printing money to pay for Obama's spending agenda. This led us down a very dangerous road and has compromised the US economy as well as the independence of the Federal Reserve.

Creating money, as Obama forced the Fed to do is basically the "Last Resort" of a central bank. It's generally not an option that is utilized if there is any alternative. Now 8 years after his 2 terms we sit at 20 TRILLION+ in debt and much of that was Fed printed money to fuel the governments multi trillion dollar annual over budget spending.

China, the US's biggest lender, has been closing the taps to our borrowing and making the government turn to the Fed as the only resource for the money needed to fuel our governments spending spree.

But Fed assistance is causing inflation problems and a vicious cycle develops. Rates rise over concerns about the government spending and both businesses and consumers end up with higher borrowing rates. Higher yields stall the economy, and a negative feedback loop results as the central banks buy up government debt.

The idea is that in a recession the government can increase spending and stimulate the economy into a recovery. Also known as "Kick starting" the economy. It is betting that if it spends all the money quickly it will create jobs and the people with those jobs will spend the money they earn on other things, increasing economic activity, and that that will lead to a recovery and the government can scale back its spending..

The Fed thinks that during a recession the money supply must be increased to stop deflation. So they increase the money supply in an effort to intentionally provoke inflation. Ideally the 2 cancel each other out and prices stay constant.

Problems arise when the government can no longer borrow enough money to spend. A second problem is that since the Fed already has interest rates down to almost zero, there's not much else it can do to increase the money supply short of dumping new money into the economy. Effectively giving the federal government the cash it needed to go on an annual spending binge.

There are solutions... stock up on things that are immune to inflation... like GOLD.  Gold can be acquired in small increments (1g) that are affordable to all (about $73, these days, for a Kinebar certified gram of gold) 

Let me help you to get started today... Contact me, Udo Hoffmann, at primusphilum@gmail.com or (715)426-0518 for a quality assessment, detailed information and instruction on how I can help you to get started today.