Did you know your dollar is worth less?

Have you heard about the Federal Reserve’s plan to end QE2? If not, you are not alone. For the last several years the Federal Reserve has embarked on a plan to ease the nation’s credit and economic problems though the use of a plan called “quantitative easing” or also known in short hand as QE. To date there has been a total of two phases to the program in which the Federal Reserve buys the debt of the Treasury Department. Sounds great? Not really, as the money that the Federal Reserve uses to buy the debt has nothing to back it up. It’s just simply cash that the Federal Reserve bought from the Treasury Department and then returned in exchange for bonds. Bonds that the Federal Government promises to pay back to the Federal Reserve with money it prints or receives in taxes at a later point in time? Confused yet? Well many people are. What our Federal Government is doing is nothing new and in fact has been repeated over the centuries by all nations at some point in time and generally has resulted in the death or decline in that nation.

Surely it can’t be that bad, you ask? Actually it can be much worse! A history lesson is needed, but it will demonstrate the results of a government issuing currency with promises that it has no ability to fulfill. We have all heard of World War I in which Germany tried and failed to conquer large parts of the world. Needless to say, they lost that war, but it lead to a treaty in which the winning nations, dreadfully short of hard currency, (read gold and silver), decided that Germany would be responsible for the cost of the war. Being the winners, they had no problem with a reparation program, (read taxes), that basically devastated the economy of Germany. Germany detached its currency from the gold standard and began printing money. It tried to borrow money on the open market, but that only speed up the decline in the value of it money. Does this sound familiar? Think hard! In the United States, we no longer have a gold standard; we are the largest borrower in the world by far. In fact our borrowing rate dwarfs the economies of Canada (9^th largest) or Russia (10^th largest) and is almost as large as the economies of either Italy (7^th largest) or Brazil (8^th largest). In fact, the printing and borrowing has gotten so bad that there is no chance of it being reduced anytime in the near term as we now have a whole class of people who are now dependant upon the money they receive, (entitlements) in order to survive. We have lost that many jobs in this nation.(read more here)

Redgage photo of the day----(whooping crane)

Enjoy!