Wednesday, November 26, 2008

United States of Funny Money

Zimbabwe here we come !! Right back where I started from:

Weimer style hyper-inflation is a heartbeat away !

Bailout pledges have reached a maximum limit of $7.7 trillion US !

No scratch that !!

The Fed just pledged another $800b in new schemes to bring the grand total to $8.5 trillion !

Where does all this money come from ?

a/ The printing press
b/ Taxes

See those greenbacks in your pockets and bank vaults that you worked so hard for ? Either Americans will be taxed directly (which could pay for a small part of this) or the easier option, is the Fed will run the printing presses and send the supply of money soaring, which makes every existing dollar lose its value.

This has precisely the same impact as a tax for dollar-holders, but with the added benefit of the public being mostly unaware of whats going on until its too late and prices start soaring.

The only guaranteed way to avoid the tax is to dump your dollars early and buy gold.