I feel like an MTV contestant in one of those glass enclosed money-grab machines. The air pressure’s a rush and money’s everywhere. It seems to be growing all around me yet I’m stuck with the two twenty’s and three five’s I can manage to snag.
Such is the money funneling out of the Treasury doors.
The Treasury’s money is suffocating the U.S. and I mean the physical greenbacks in circulation. New dollars are so in.
Graphs can be scary but this one is not hard to understand. The vertical gray bars are recessions. The blue line is the total amount of money in circulation, in billions of dollars. Things were pretty flat until the U.S. got off the gold standard in 1971. The spike at the end should alarm you. From the start of 2008, to the beginning of February 2009, the monetary base has increased by about 194% or roughly $900 billion. Mind boggling numbers. This does not include the $787 billion stimulus package, signed into law by President Obama on February 17, 2009. Nor does it include the $410 billion omnibus spending bill signed by President Obama on March 10, 2009. This bill contained over 9,000 earmarks and was signed by President Obama in isolation, away from any television cameras. The $1.197 trillion for the stimulus package and the omnibus spending bill will be borrowed and printed. Don’t forget the seemingly inevitable increase in taxes either. The tax code will likely become more progressive. This is one option to collect some additional revenue but the borrowing and printing causes inflation, which is an invisible tax to everyone. Invisible and silent.
New money is printed to pay for new spending. New money is also printed to make interest payments for past spending, that was borrowed. Every new dollar that is born makes the dollars in your paycheck, bank account and retirement worth less.
Alot of our debt is borrowed from China. Did you see their female gymnastics program during the Beijing Olympics? Scary stuff. At this rate the next generation of Americans will be working for them full time. Probably the 11-year-old girls who rocked the mat routine. Reading graphs won’t sound so bad anymore. Those girls must have some pent-up rage.
[...] the United States, more specifically the Federal Reserve, has pumped trillions upon trillions of dollars into the economy. As Milton Friedman famously said, “inflation is anywhere and everywhere, [...]