Fed To Increase
The Money Supply — Again
Gold And Commodities Soar With Fed Inflation News
World Marching Towards
Anti-Christ’s Global Currency
And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six (Rev. 13:16-18).
The Federal Reserve Makes Plan
To Increase the Money Supply — Again
Oct. 17, 2010 (Oct. 13, 2010)
The Federal Reserve Makes Plan to Increase the Money Supply — Again
By Bob Adelmann – New Ameican
http://www.thenewamerican.com/index.php/economy/commentary-mainmenu-43/4878-qe2-ship-of-fools
“Isn't it funny how they cannot find inflation when we see diesel at $3.40 a gallon, Jimmy Dean sausage at $4.25 a pound (up from just over $2.00)? Oh wait! That's right. They exclude food and energy from the calculation. I suppose that's OK. I mean how often do you need to purchase food or gasoline as compared to a new computer?” —Plain Old American Oct. 16, 2010.
US Fed playing the number games; real inflation at 8.48%
The notes of the latest meeting of the Federal Reserve, released on Tuesday, clearly show the Fed’s next step in trying to solve the problem it has created: Quantitative Easing II, or QE2 (qualitative easing is Fed-speak for increasing the money supply). The meeting lasted more than five hours and consisted of a debate about when to start the process: now, or later. Some on the board “consider it appropriate to take action soon,” while others said the Fed should act “only if the outlook worsened.” Reporting on the release, the New York Times said this is “one of the hardest choices the Fed has faced since the recession began.” (See: Get Ready For A World Currency [Economist; 01/9/88, Vol. 306, pp 9-10] The Phoenix Dollar Advantage Russia Proposes Creation Of Global Super-Reserve Currency).
In a clever sound-byte, Robert D. McTerr, past president of the Federal Reserve Bank of Dallas and a supporter of QE2 now, said, "If you lead the horse to water and it won’t drink, just keep adding water and maybe even spike it. You definitely don’t want to take the water away." Of course, by expanding the money supply (which the Times reveals in a remarkably candid explanation here) the effect of QE2 “is the same as printing money in vast quantities.” In that explanation the Times made clear not only McTerr's lack of understanding about how money works, it reveals ignorance of the result of increasing the supply of money: Its purchasing power is not “spiked” but diluted further.
Some signs of intelligent life did appear at the meeting, however. H. Robert Heller, a former Fed governor, opposed doing any more diluting, distancing himself from the pending disaster: “I would do nothing. If they start to monetize the federal debt, they will dig themselves a much deeper hole later on. That’s what we learned from the 1970s, when the Fed undertook a very expansionary monetary policy. It took a double recession in the early 1980s to wring [that] inflation out of the economy. [Emphasis added.] We don’t want to repeat that.” Also, in a speech in Denver on Tuesday, Thomas M. Hoening, president of the Federal Reserve Bank of Kansas City, said: “If we have learned anything from this crisis, as well as past crises, it is that we must be careful not to repeat the policy patterns we have used in previous recoveries.”
Sheldon Richman, an Austrian-school economist (a free-market economist) and editor of The Freeman, explained the process involved in any inflationary strategies employed by the Fed: “When the federal government spends more than it taxes, it has to get the extra money somewhere…. It borrows from the credit markets by selling Treasury securities to investors.” This isn’t inflationary as there is no new increase in the money supply, merely a shifting of existing credits from one place to another. But, when the Federal Reserve buys Treasury securities, “it pays for those securities by creating bank reserves" — money from nothing — or, as economist John Maynard Keynes suggested, by performing the “miracle …of turning stone[s] into bread.”
Richman makes clear what is happening here: The additional quantity of money [created from nothing] does not find its way [evenly] into the pockets of all individuals; not every individual of those benefited first gets the same amount and not every individual reacts …in the same way…. [Thus we see] that inflation is a form of government distribution of income…. Make no mistake about it. This is a government-engineered transfer of resources, that is, a violation of property rights. And by the way, the distribution is not from rich to poor. If anything, the distribution is upwards.
At what point, then, does the resulting inflation push the price level up so fast that individuals, rather than conserving (or “hoarding,” a pejorative used by the monetary statists) their cash, perceive it more in their own self-interests to start spending the cash before prices “run away” from them? When, in other words, “Will we have hyperinflation in America?” as explored by Jeffrey Harding. Harding outlines 12 steps toward a “hyperinflation setup” including:
üGovernment spending continues unabated;
üTaxes increase;
üThe economy slows further;
üThe government sells even more debt to the Fed;
üInterest rates on that debt rise significantly;
üThe Fed buys more and more of that debt;
üInflation takes off, showing monthly and then weekly rises in the price level of common items in stores and supermarkets.
To be fair, Harding doesn’t conclude that hyperinflation is imminent. While “a careful analysis of theory, fact, and history leads me to conclude that inflation …is in our future, it is quite of leap of fancy to say we are certain to have hyperinflation.” In fact, as of now, as was just confirmed by Bloomberg News, “Inflation in the U.S. will fall short of the Federal Reserve’s long-term goal [of 2 percent].” On the other hand, graphs from the Federal itself show the early warning signs of the two elements that must be present for hyperinflation to begin: an increase in the supply of money, provided by the Fed, and the velocity of money, reflecting individuals’ rate of spending of that money before it loses any more purchasing power. Both are increasing.
Gold And Commodities Soar With Fed Inflation News
Oct. 14, 2010
Gold and Commodities Soar With Fed Inflation News
By Thomas R. Eddlem -- New American
http://www.thenewamerican.com/index.php/economy/sectors-mainmenu-46/4888-gold-and-commodities-soar-with-fed-inflation-news
Commodities markets have soared on news of a global currency inflationary war by central banks around the world, with gold prices climbing to more than $1,375 per ounce in overnight trading October 14. (SEE: The Forced Economic Collapse & Coming Global Currency The Global Financial Crisis & The Safety Of Gold? Read Executive Order 6102). Other precious and semi-precious metals such as silver, platinum, palladium, and copper also topped recent highs in successive days of trading. But it's not just metals that have risen sharply in the wake of the competitive devaluation of the dollar, euro, and other major currencies. Agricultural commodities have also soared as the anticipation of a higher volume of dollars chasing a stable amount of material goods. The Thomson Reuters/Jefferies CRB Index, an index of 19 major commodities that includes farm products, oil, and metals, is up nearly 19 percent since June 1. For example, corn prices have increased more than 10 percent in the past two days.
Currency inflation has a number of negative impacts upon the economy, not the least of which is that much of the business investment needed to jump-start the moribund economy is being chased into material goods as a hedge against inflation. Because raw commodities do not create jobs or dividends (though some investment ETFs do), the economy is being starved out of entrepreneurial capital and into a protracted recession/depression by the inflationary actions of the Federal Reserve Bank.
Moreover, inflation will eventually lead to higher interest rates, as investors seek to recoup inflation losses. This will result in higher U.S. government debt refinancing costs, spiking the level of the federal budget deficit. Each one-percent increase in the interest rate needed to finance the $13 trillion (and climbing) U.S. national debt will add $130 billion per year to the federal deficit. This one-percent increase in interest rates (and the resulting increase in federal debt) will essentially amount to more than a $1,000 per year tax upon each of the approximately 115 million households in America for each one percent increase in interest rates.
Conclusion:
The global banks and politicians are engineering global currencies meltdowns. No matter how much gold you own it will be eventually called back in to the central bank. If you refuse you will be sent to jail (and branded a terrorist trading on the black market) under the Trading With the Enemy Act. You will be forced to sell your gold back to the government at deflated prices when the new union currency, and then global currency is established. The ultimate goal is to establish a global, electronic cashless society for the kingdom of the anti-Christ.
And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six (Rev. 13:16-18).
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