by Mike Whitney May 2 2007 - 11:11am permalink
Ah-ha! So the Fed gooses the money supply, stocks shoot up, and everyone’s happy---right?
Wrong. Growth in the money supply should (closely) parallel growth in the overall economy. So if GDP is shrinking (which it is) and the money supply is increasing then—Viola!—inflation. (“11.8%” to be precise)
Of course inflation doesn’t affect the investor class or their fellow-scoundrels at the Fed---the more money floating around the markets the better for them. It’s just the opposite for the pensioner on a fixed income or the salaried wage-slave who gets a 15-cent pay raise every millennia. They end up getting ripped off with every newly-minted greenback.
But then that’s the plan---to shift zillions from one class to another through massive equity bubbles. All it takes is artificially-low interest rates and a can of WD-40 to keep the printing presses rolling. It’s so simple we won’t dignify it by calling it a “conspiracy”. It’s just a swindle, pure and simple. But it never fails.
Every time the Fed prints up another batch of crisp $100 bills; they’re confiscating the hard-earned savings of working class people and retirees. And, since the dollar has dropped roughly 40% since Bush took office in 2000; the government has absconded with 40% our life savings.
That’s the truth about inflation; it is taxation without representation, but you won’t find that in the government’s statistics. In fact, the Consumer Price Index (CPI) deliberately factors out food and energy so the working guy can’t see how the Fed is robbing him blind. The only way he can gauge his losses is by going to the grocery store or gas station. That’s when he can see for himself that the money he works so hard to earn is steadily losing its purchasing power.
Something Ron Paul addressed last week, but no one I know of, apart from the bloggers at Lew Rockwell, noticed.
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