QE3 Pigs At The Trough!

First, I apologize for the length of this post, but we are moving into a real crisis here! The pigs are back at the trough (apologies to pigs, everywhere). Something must be done, VERY quickly.

Nothing in the financial world can be simplified too far. However, Quantitative Easing (QE), the latest in the "Let's-try-to-spend-our-way-out-of-debt" schemes brought to you by the US Government, is fairly simple. The govt will float a bond issue, and then print more money to buy its own bonds. They create more debt (aren't we drowning already?) and then pay it off by printing new dollars (even MORE debt!). They are borrowing to pay debt they just created. If you and I did this, it would be FRAUD!

This is like getting new credit cards just to pay the interest on your overwhelming credit card debt.

A few facts. Every dollar printed DECREASES the value of every other dollar in circulation. This weakens the spending power of dollars at home and abroad. As the value of the dollar decreases, the spending power of every dollar decreases. When this happens, prices for goods appear to rise. What is really happening is not that the value of the goods increase, but that more must be charged to actually pay for the cost of goods and make a profit.

The price of gold and gasoline has not dramatically increased because these goods are more valuable, or more scarce, but because the value of the dollar you are using to buy them has decreased, dramatically! 

Consumer Reports Online placed the average gas price on January 19, 2009 at $1.85 per gallon for Regular gas. Now, in September 2012, we are looking at an average price of $3.94—almost $4.00, an increase of 113% over a three-year period. There have been no oil shortages, and no production slow-downs, only the decrease in the value of the dollar. Since the price of oil is pegged to the dollar, every time the dollar decreases, gas increases, groceries increase, everything paid in dollars increases!

The US has done two of these QE’s in the last 3 years. They did not stimulate the economy as planned, and look at what is happening to the value of the dollar and to the price of everything! Look at what is happening to the National Debt—nearly $6 TRILLION more over three years—a 51% increase! So, in the wake of the first two FAILURES, we are going to do QE3. “We CAN’T be overdrawn, we still have checks left!!”

The government will issue up to $40 BILLION per MONTH in real-estate-backed bonds, and print a corresponding amount of money to purchase them back, with no end date planned! All this to shore up a real estate market already hyper-inflated by government mismanagement! This means that the National Debt will increase by that same amount EVERY MONTH. This will add up to a half-trillion dollars every year it is allowed to continue, and that is over and above the spending already slopped in the trough! 

It didn’t work the last two times. So, governmental logic states that we must keep trying it until it does work because the theory is sound! Einstein’s definition of Insanity is, “Doing the same thing over and over again and expecting different results. The first time was an experiment. The second time was self-destructive folly. This third attempt, with everything that is fiscally at stake, is sheer, unadulterated, unmitigated madness. If this fails on the scale of the last two failures, there will not be enough of America left to attempt a QE4.

Wake UP!!! You are sitting back and allowing this to happen to YOU! Speak up and tell your friends. Write your “Representatives” (we still call them Representatives, because they still represent their OWN best interests!).