>The government is not printing money
What the heck is the difference between printing and creating when the created money will NEVER be paid back?
Cut from today's Mogambo Guru:
An upshot is that all of this “quantitative easing” of SDMM, and the reference to the anagram, is that most of the money that the Fed is creating is used to buy government debt! This increases the national debt, so it is not surprising that Agora Financial’s 5-Minute Forecast reports, “Your family’s share of the government debt is now over half a million dollars. A record $546,668, to be exact”!
Naturally, I am thinking that at 5% interest, each family owes, in addition to the $546,668 principal, a princely $27,333.40 in interest this year alone!
Fortunately for the government, they do not have to actually tax each family $27,333.40 this year because the government will just sell more Treasury debt,bought by the Federal Reserve with money they created just for the purpose.
Unfortunately, the family will pay it anyway, except in the form of higher prices as all this new money creates inflation in consumer prices!
The 5 says that they were quoting a USA Today study, which claims that each American family’s share rose 12% in 2008. That’s $55,000 in new government debt last year for every U.S. household – thousands more than the median household annual income.”
Perhaps as a result of all this bankrupting idiocy, the London Times reported that Treasury Secretary Geithner told the students at Peking University during his visit to China that “we believe in a strong dollar,” and that all the trillions of dollar’s worth of US debt owned by the Chinese “are very safe.”
If he had been addressing the usual kind of American morons that big-shot officials usually address, like the Economics Club of New York, Princeton, Harvard or Congress, then the audience would have sat there, dumbfounded, before applauding politely and saying, “Duuuhhh! Okay!”
But in China, Geithner’s speech was greeted with laughter! Hahaha! This shows that the Chinese are very perceptive and not stupid, in contrast to the USA, as this is the kind of response that it really, really, really deserves.
If Mr. Geithner really wanted to act smart, he would ask the Chinese why they have suddenly added their growing hoard of gold to their money supply. And if the Chinese wanted to be gracious hosts, they would have told him.
If he had asked me why I am buying gold, I would have told him, “Because this investing stuff is easy when a Federal Reserve creates 13% of GDP so that the federal government can spend a third of GDP! Whee!” |
