The U.S. Government and Consumers are Big Spenders Heading for a Crash
David Redick
Activist Post.com
Monday, January 5, 2015
Most U.S. citizens have been spoiled by the profits made from stock and real estate investments since 1990, and they see the 2008 crash as just a bump in the road. They are not aware that the hot economy was a bubble caused by excessive creation of new money (monetary inflation), and that a bigger crash is coming. The bubble started when Nixon cancelled the 1944 ‘Bretton Woods’ gold standard agreement in 1971, which allowed the government to make money ‘out of thin air’. Nixon cancelled because we had been creating billions of new USD to pay for the Vietnam War, LBJ’s Medicare, etc. Other nations (especially our buddies England and France) were redeeming their ‘falling value’ paper dollars for gold because they knew we were running out! Since then our money supply has zoomed up, and the value of the US Dollar (USD) has fallen in purchasing power by over 90%. A good example is that a family car cost about $2,000 in the 1970s and is about $20,000 today. Most people think it is just price increases by greedy corporations, but in fact it is the lower purchasing power of the USD (price inflation).
Even highly educated analysts make the same mistake. I was shocked to read the rosy evaluation of our economic condition, and future prospects, in a Nov. 11, 2014 article by Jay Lehr Ph.D., Science Director of the Heartland Institute. He wrote; ‘The U.S. economy is holding up well. Industrial production is at its highest point since 2008’, then ‘Jobless claims are at their lowest since 2000’. He uses a paragraph heading ‘Bright U.S. Outlook’. He apparently believes that government management of the economy, such as the ‘QE’ series of money creation by the ‘Federal Reserve System’ (the ‘Fed’, our central bank), will create a rosy future. Switching gears, after a trip to Europe he said; ‘They appear to be oblivious to their long-term problems.’ Too bad he can’t see (or won’t say) the same in the U.S.!
The Rest…HERE
