The Humble Libertarian

Building a small army to take over the world and... leave everybody alone.


Wednesday, April 18, 2012

How Long Before America Hits the Wall?

A very interesting analysis on, well, the end and how a series of events will play out. For starters, the government will continue to welfare-warfare state as long as possible to placate the masses who believe that government is working.
Decades of manipulation by the Federal Reserve (through its creation of paper money) and by Congress (through its taxing and spending) have pushed the US economy into a circumstance that can't be sustained but from which there is no graceful exit. With few exceptions, all of the noble souls who chose a career in "public service" and who've advanced to be voting members of Congress are committed to chronic deficits, though they deny it. For political purposes, deficits work. The people whose wishes come true through the spending side of the deficit are happy and vote to reelect. The people on the borrowing side of the deficit aren't complaining, since they willingly buy the Treasury bonds and Treasury bills that fund the deficit. And taxpayers generally tolerate deficits as a lesser evil than a tax hike....The only way for the politicians to buy time will be through price inflation, to reduce the real burden of the debt, and whether they admit it or not, inflation is what they will be praying for. The Federal Reserve will hear their prayer. It is 100% committed to protecting the value of the dollar, except when it is debasing the dollar in an effort to cure a recession or prevent a depression. It's been doing that important work since 1971, when the dollar slipped the leash of the gold standard. With every downturn in the economy, the Fed speeds up the creation of new cash. Each time, the economy does seem to recover, but the economic distortions that caused the recession are allowed to linger to one degree or another.
Read the rest here
Financial Sense 

Judy Morris,
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