Saturday, March 24, 2012

Tsk, we're going to have to steal your money, sorry about that

The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level.  It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today.  What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.

The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits.  In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.

Why target an annual 2 percent decline in the dollar’s value instead of price stability?  Here is the Fed’s answer:

“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling–a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”

In other words, a gradual destruction of the dollar’s value is the best the FOMC can do.
 More here:

In "other" other words, the government has ruined the value of our currency by printing up trillions of dollars out of thin air (but nobody could have predicted this) ... and instead of  facing up to the consequences of it now, they prefer to stretch the crushing over 20 years (or more) ... you know ... so the idiot frog doesn't notice the water heating up.

LMAO, they're stealing your (and your children's) money and freedom and what do you do?  Why, you vote "Democratic" of course.  After all, "Democratic" is good ... right?  Yes, they're for the little guy.

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