Our government is doing alot of VERY STUPID things right now with the money system here in the US.
They gave Paulson, the head of the treasury, 700 billion to do with as he saw fit! Paulson gave 125 billion to AIG with no strings attached. He did this after AIG went and had parties on the first bailout they were given. Now we hear that they are going to use alot of the money for bonuses for the upper management. The 700 billiout was to go to buy "toxic assets" from the banks so that they would start lending again. The money was given to the banks without any strings, like AIG, and they used their bailout to buy other banks or they have sat on the money and are not lending it out. So now states, cities and large companies are going to the Fed for loans because the banks still will not do any short term loans, which was the reason for the bailout to start with.
Additionally, while they are giving all this money to companies and banks that have no intent of doing what is needed to get the economy back on tract ( short term loans to companies so that they can make payroll and expand), the treasury (Paulson and others) have the printing presses turned on full blast. They have churned out an additional 2 Trillion dollars that is currently being sat on by the banks. There is normally 800 billion dollars in circulation at any one time, so this additional influx of cash will greatly devalue the dollars in circulation. Since the banks are sitting on this money right now, we are not feeling the effect of the huge inflation that the release of this money into circulation will have. A few years ago the treasury stopped reporting how many dollars were in circulation, so it is difficult to know any more how much is really out there. When the banks release the spigot on all the additional dollars they are sittiing on, there will be massive inflation and the money that you have saved with be basically worthless.
If we are lucky the 2 trillion dollars, wont be added to the money in circulation, but I am not banking on it. The crazy way that everyone is treating the financial problem that this country has tells me it is only a matter of time before they open the spigot and release all those additional dollars into circulation. It is like they want to trash the economy. There is talk about some wanting a "one world currency". This would be much easier if the currency that is the strongest and most relaible, the US dollar, is no longer strong and reliable. It would put the currancys of the world on a more or less even basis.
In the end we are either going to have a deep recession, a depression, or worse yet . . . a depression with hyperinflation. I am trying to prepare for the worst. Any thing less will be a cake walk by comparison. Anyone who is interested in learning about depression with hyperinflation should Google the Weimar Republic. My German grandmother had relatives there and use to talk about the wheelbarrow full of money for a loaf of bread. It was always a concern of hers and she always kept anything that still had some value for a "rainy" day. I never thought that I would see it happen here but it looks like she might have been right all along, though a little ahead of reality. Hyperinflation is happening already in one of the countries of Africa where they keep printing money with more and more zeros. The only thing that will have value will be things that you have stock piled. Clothing, shoes, food and seeds for food, etc that you can supply yourself and barter with others that may have a service that you need.
Sorry to be such a "doom and gloomer" I just washed my foil hat and I cant do a thing with it!
Never discount momma's intuition.
