An Inconvenient Debt

US Economy: The Philosopher's Stone

Hingsight is 20/20, Ron Paul should have been elected President.

This is the best Ron Paul, Peter Schiff video I have seen yet.

Letter to Senator

Here is the letter I sent to my senator who voted Yes in the Stabilization Bill:

Dear Senator Kyl,

Thank you for your response to a previous email urging you to vote no. Please consider these points as to why the "stabilization" bill is a bad idea:

1. Creates lack of confidence in banks, markets, and the currency.
2. Government control of capital is govt. control of capitalism. Capitalism would have punished those who did wrong. Who is the government to bend capitalism to do your bidding?
3. Why would companies with debt worth anything want to participate in this?
4. It did not repeal the Community Reinvestment Act
5. Gives the Treasury TOO much power. Since we do not elect the Treasurer this is a very bad idea!
6. Brings us closer to hyperinflation by raising the debt to 70%-85% of our GDP, printing more money, and the reluctance of congress to deal with the problem. Instead you continue to make it worse by spending more money with a bottomless bank account, as proof by the shameless pork added to the bill and most other bills.
7. We will be stuck with the bill via inflation
8. It is unconstitutional for this bill to originate in the senate because of the added new taxes and a suit should be filed against all senators who voted yes on this bill by violating their oath of office.
I hope the "do nothing congress", turned "do something congress" will become the "do the right thing" 111th congress.

Sincerely,
Cydnie
Arizona

Hyperinflation

It seems as if our government is following the manual "Causing Hyperinflation for Dummies" that requires huge government debt, printing money, and an immobilizing fear of repercussions to government actions (no one wants to get blamed and no one wants to cause a recession/depression). All these actions are a path the US government is clearly following.

Here is a summary of an article from Economicshelp.org:

So What is hyperinflation? It is very basically unchecked out of control inflation.

Examples:

Germany, 1922-1923 -- During the hyperinflation episode in Germany from 1922 to 1923, the Weimar Republic printed postage stamps with a face value of one billion marks, as prices doubled every two days. At one point in 1923, the exchange rate equalled one trillion Marks to one dollar

Yugoslavia 1993-1995 -- prices increased by 5 quadrillion per cent


What Causes Hyper Inflation?

Usually, countries with hyper inflation have the following features:

-Large government debt, usually over 100% of GDP. (Henry Paulson, by the way, is asking for an increase in the legal ceiling on federal debt to $11.3 trillion or 70% of GDP.)

-Printing Money. To cope with meeting the debt, the government starts printing money. This decreases the value of existing money creating a multiplier effect where people lose confidence in money and keep demanding wage increases.

-Reluctance / inability to deal with it. When Germany experienced hyperinflation in the 1920s it was not a phenomena they fully appreciated or understood. Their primary fear at the time was unemployment. They feared that unemployment could precipitate a Communist Revolution so they didn't want to do anything to reduce demand and possibly cause a recession.

Lack of Confidence in the Finance Sector

The experience of inflation can become engraved on people's mind making them suspicious of financers, bankers and the general economic system. It is no coincidence the Nazi party were able to feed off these suspicions to introduce extremist policies.

I write about this because it will have a great impact on our way of life as Americans. It will impact your ability to borrow money, to purchase anything due to higher cost of goods, etc. That means be prepared now with tangible goods. Gold will not feed you. Silver will not feed you. Just like having an emergency kit for a natural disaster, have an emergency stock for an economic emergency. If the fool says it could never happen then Murphy's Law says it will happen! Those who laugh now will laugh last when it happens I think. Katrina could never happen, 9/11 could never happen and they have. I'm just sayin'-ya' know?! :)

Here is the link to the above summary of an informative article describing hyperinflation in greater detail:

http://www.economicshelp.org/2008/04/hyperinflation-causes-costs-and.html

Auto Industry Bailout and Deliberate Degradation of US Dollar

Auto Industry Bailout and Deliberate Degradation of US Dollar

$25 billion this year alone, to the Auto Industry? Not exactly big news compared to $700 Billion but it is being passed through congress. But the effects of passing such a bailout is already snowballing.

For some reason the government sees it of benefit to "tank" the dollar. Everytime the FDIC is allowed to back these loans and bailouts, it ultimately comes from the US Treasury which we the taxpayers are footing the bill for. While we may not receive a new tax bill in the mail, we will see it in inflated prices for everything due to excess of currency in print.

Using the current crisis atmosphere to quickly push through this bailout is reminiscent of the Patriot Act, the most wide-spread threat of civil liberty in US history.

I wouldn't be surprised based on articles from the Council on Foreign Relations and elsewhere if this opportunity isn't used down the road to consolidate currency in some form with either North American countries or even other industrialized nations.

Obviously, their argument would involve fear tactics and an appeal to strengthen currency confidence. In reality this is their plan for consolidating wealth and furthering their plans for a "New World Order". This would result in the dissolving of the sovereignty of the United States and the Constitution. It may not happen right away but maybe next year we should know if the atmosphere is set for it. It is bad but not bad enough, yet.