Helicopters and Genies and Napalm, Oh My!

Posted: November 4, 2010 in Commentary, Economics, News, Politics
Tags: , , , , , ,

Welcome to the helipad!  Yesterday, the Fed’s Ben Bernanke announced QE2, the great grand savior of all that is good and moral in the world economy.  This is Ben’s latest attempt to jump-start the faltering markets around the globe.  By infusing a huge amount of newly printed money he hopes to stimulate spending in the private sector, oddly by stealing from taxpayers and giving it to the federal government to spend in an orgy of new debt creation.   

The FOMC announced a plan to inject $600 billion (perhaps as high as $900 billion) into bond markets by buying Treasury debt.  This funding will be pushed into federal spending and thus boost consumption and raise GNP.  The miraculous genie of Keynes will then make all things happy for all.  Of course, Keynes doesn’t have to do any heavy lifting unlike all of the hapless souls having their future earnings and current wealth stolen from them by the Fed’s insidious undeclared currency devaluation.  Never mind that it has never worked in the last 4500 years of recorded history, we’ve got the genie to grant those wishes.

US Fed easing may mean 20% dollar drop according to Bill Gross, manager of the world’s largest mutual fund.  Interestingly, other nations are doing the same thing.  The Japanese have been doing for twenty years with no success whatsoever.  Their stock and property markets hover where they did in 1990 when massive quantitative easing began there.  Look for other countries to fiddle with their currency supplies to combat the attempt by the US through the Fed to export inflation to other economies to rally our own

Governments have systematically destroyed their currencies repeatedly.  This always inevitably ends in the collapse of the government after inflicting years of suffering on the part of residents in the territory.  In the end the government uses coercive force to devalue the currency to pay the debts that no citizen would have accumulated voluntarily.  Rome, Spain, France, Germany, Britain, Russia, and soon the US have all fallen from their lofty perches by falling prey to the mystique of the Genie of Keynes.

In the US, the napalm is already dropping in the villages.  Expect consumer price inflation on a much higher scale that the numbers being pimped by the government in the CPI.  Agricultural and energy price are already soaring, though they are conveniently hidden from the public by their exclusion from the Core CPI.  Commodity prices are also increasing markedly as the US drives the value of the dollar downward.  For a truer picture of price inflation and other economic factors in the US, John Williams of Shadow Government Statistics calculates the CPI as it was done in 1980. It shows the CPI at nearly four times the fraud being publicized from Washington.

Understand that the real distraction that is going on here is the portrayal of price inflation as actual inflation instead of measuring it by currency inflation.  Whenever a government or central bank creates new money (counterfeiting if you’re private not public) the value of all money in circulation will decline proportionally.  It won’t happen immediately.  It will only occur after the markets have added demand for the same supply of goods increasing the prices of those goods.  This is how government pushes costs on to taxpayers without ever legislating a tax that might deter their reelection efforts.  This is how wealth transfers from its owners to the criminal gangs that make up the government.

Be wary on the yellow brick road, Dorothy.  Helicopters and Genies and Napalm, Oh My!!!

Copyright © 2010, Jim Blandford.  All rights reserved.


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