Monday, March 23, 2009

Late Night Ramblings. Money, Politics.

It's 1:10am Sunday night and I am having trouble sleeping. So, I thought maybe I'll just go and create this blog to see what comes out.

Politics and money
I have been reading articles about how the Fed for the first time in history is buying Treasury bonds to help finance the huge federal deficit. This is truly an amazing event. Because they announced that they are going to buy 1Trillion dollars worth of US Government Ttreasury notes. Where are they getting the money? They are just going to print it. What does this mean? It means that they are going to create a lot of inflation.  Where before China and Japan bought most US treasury bonds from the excess amount of money they generated from the positive balance of trade with the US, now we are spending the money and just printing more from thin air. No goods had to be produced, no services had to be rendered, no savings had to accumulated. Nothing. All we are doing is printing the money to finance our own debt. Since we now owe it to the Federal Reserve, instead of another country or investors, the USA will probably never have to pay it back. How do you think that make those other countries feel that have worked so hard to generate enough legitimate income to be able to buy trillions of dollars in US Savings Bonds and treasury notes? China just announced that they are worried about depreciation of their investments. Wouldn't you be if you paid $2000 of your money you earned with hard work and sweat, and then someone else comes in and buys the same thing with $2000 in counterfeit money that they just printed up in their garage. And before you know it, more and more of this funny money shows up in circulation where it gets to the point that stores no longer think it is worth as much, so they start raising prices because the money is too plentiful and everyone has some from the printing presses (the govt).  So, they raise the prices way up to soak up all the easy money that is in circulation. So, the next time you go back to buy another item for $2000 of your hard-earned money, you find out they are charging $10,000 for the same item. And the government is still buying it up at the higher price because all they have to do is run the printers 24/7 and pay whatever Sam Goody is charging!

So, you are left in the poorhouse even though you make the same amount of money you made the year before. That's called hyperinflation, and it just might happen to us because of what the Fed is doing.  So, hold on to your Real Estate investments, Gold or foreign currency where they don't print money just to pay bills.

Check out the articles in this website:

SO, this binrgs me to a great new idea I thought of. Since we are now just printing money to finance the Federal Governemnt spending and deficit, then why don't we just take the taxpayer completely out of the loop?  Think about it, the whole Federal budget could be financed with printed money. The wars in Afghanistan, Iraq, elsewhere. The stimulus package. The huge beareaucracy. Everthing! The whole enchilada. Just print the money and keep us hardworking taxpayers out of the loop since most of us don't really support all this spending anyway. Remove all taxation. Who needs it?  We can just print our way out of this. And as long as the world still believes that the greenback is worth something, and most third world countries certainly do as well as the developed world at this point, the populace can be lifted of the burden of taxation. If this were done, we would not need a stimulus package since we would have so much more money to spend on our own.  It is the least they could do for us in case the hyperinflation occurs as predicted by many.

Let's end taxes. Who needs it? Just Print the Money!