Saturday, November 6, 2010

Federal Reserve - Monetizing the National Debt

In a desperate attempt to grow the economy, the Federal Reserve, headed by Chairman Ben Bernanke, is going to buy $500 Billion to $1 Trillion in government debt in the coming months. To do so, the Federal Reserve will just print money and pump it into the economy through the banking system. This in addition to the $1.7 Trillion the Federal Reserve already spent, again just printing money, to take bonds off the hands of banks to stabilize the banking system. This is all happening because there are not enough foreign investors, the Chinese and others, willing to buy US debt any more because it is deemed too risky.

This is a very risky move that most likely will lead to very high inflation and the destruction of the dollar. While it will make American goods cheaper overseas, it will be much more expensive to buy foreign goods in the United States. Remember, many of things Americans buy are manufactured overseas. This move will also bring down interest rates further, which will be devastating to many senior citizens that depend on interest income from savings to supplement their retirement incomes.

The value of the dollar could drop by 20% or more, so $10,000 in savings could suddenly only have the buying power of $8,000. How can all of this be good for the American people? This is the reason the price of gold, silver and other commodities are going through the roof. Investors are fleeing the dollar to buy tangible items that are likely to appreciate in a high inflation environment. It will also be better to own real estate, especially since interest rates and values have fallen, than to otherwise have the dollars that could go into a down payment. This will be good for the housing market; but at great cost throughout the rest of the economy. The Federal Reserves's move is a huge gamble. No one really knows if it will work or make things even worse.

The Federal Reserve is trying this desperate move to restore economic growth and jobs in the United States because Socialist President Obama's Trillion dollar, deficit spending, SwindleUS Plans have failed. While Obama has created or "saved" government jobs, an insufficient number of private sector jobs have been created to put a dent in the current 9.6% unemployment rate. In addition, the uncertainty surrounding the Bush Tax Cuts that will expire on December 31, 2010 has been a real job killer in addition to Obama's HealthScrare Plan. The President and the Socialists that have controlled Congress are responsible for delaying economic recovery by their irresponsible actions.

The tidal wave hit on November 2, 2010 with the election of Republicans, who will shortly gain control of the House of Representatives, 6 more Senate seats and many new Republican Governors. Now we must focus on 2012 to finish the job. Many more Socialist seats will be up in the Senate in 2012 than Republican seats giving the American people a chance to elect Conservatives to regain control of the US Senate. And, of course, we must make Obama a one term President because his Socialist Schemes to "transform" our country will bankrupt the nation and lead to a lower standard of living for all Americans.

We must focus on electing Conservatives in 2012 that support free market capitalism, limited government, lower taxes and less regulation, a balanced budget, term limits, real energy independence and health care reform, a strong national defense, including securing our border and fighting Terrorism, the right to bear arms, the sanctity of life and family values that are the foundation of our nation. Most important, we must elect Conservatives who will adhere to the Constitution, as written by our Founding Fathers, not as contrived by the left wing media, Socialists in the last 97 years, former Presidents, Congresses, or the Courts.

We are going to take back our country in 2012 and beyond. We have to stop all the deficit spending that will lead to the bankrupcy of the United States. In 2010, we have proven that we can take back our country by our votes. We will do it to preserve our freedoms, our nation and our way of life and for the sake of our children and grandchildren. The silent majority will be silent no more.

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