Thursday, March 05, 2009

Are we doomed to relive these dark episodes in history?

I am alarmed, ye socks.

Over the last five months, we have seen a 271% increase of the money supply.

But, people aren't spending much of it. Car sales are down. Home purchases are comatose. Consumer spending is in the proverbial toilet. And, the only corporate investments being made are being made by the government.

So, where is all that money supply? Well, in the case of yours truly, the dollars are going to pay-down existing debts. But, anecdotal evidence at hand indicates a lot of folks are sitting on their cash, squirreling it away until the economy improves.

Why is that so scary? Well, think about it. If all that squirreled-away money is brought back into the marketplace alongside all the "bail-out" cash the feds are injecting into the system, the result is going to be hyperinflation.

Crack a history book if you don't believe me.

Dark episode #1:
The Weimar Republic, where (as pictured above) paper currency was so devalued by inflation, that it took cart loads of it to buy even the simplest household necessities.

Dark episode #2:
The Carter Era, when we had to outpace all the grocery store clerks, grabbing things off the shelves before they could jack-up the price stickers on us.

This is not the time for the massive government spending the ObamaNation advocates. We should be shoring-up the value of our dollar with sound fiscal policy.

Hope and change!

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