Friday, February 13, 2009

Weimar Republic, Argentina, Zimbabwe, United States of America

Wheel barrel full of cash for a loaf of bread, yep that is what we are nearing. We are taking the same exact monetary policies as these fallen countries did. Now, I'm not going to sit here and type out my research(if you want to know the details feel free to call me) but basically one word, hyperinflation. I don't mean 9-10% high inflation, i mean 300-1000% hyperinflation. This happened to Weimar republic, Argentina, and Zimbabwe and I don't see why it wouldn't happen to the US because we are doing the exact same thing they did, print $$$.
I personally feel responsible to warn ya'll about this but who ya'll need to really warn is your family and loved ones(especially if they have money). You do not want your loved ones to be blind sided by this, its like if you knew that 911 was happening and you didn't even warn a family member of yours that works at WTC. It is incredibly hard to fathom most of these doom and gloom situations but let me try to explain it to you in more details w/out confusing you.

The 1934 Gold Reserve Act removed the word gold from Ferderal reserve notes and a new redemption clause read, " This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United Treasury, or at any Feral Reserve Bank."
It was def just a change of wording but it was done with enough subtlety to keep the general public unaware. On Nov. 2, 1963, the redemption clause was eliminated completely, rendering all US currency intrinsically worthless. On that day, our monetary system was transformed from the gold and silver based system specified in our constituion to one of government fiat.
The bottom line is that rather than representing legitimate IOUs redeemable in specified weights of gold or silver, U.S. Federal Reserve notes becamse IOU nothings, mere pieces of paper that bearers were free to circulate among themselves, but which did not constitute any liability on that part of the issuer. What that meant was that any value the dollar had would depend purely on its purchasing power, which in turn would depend on the financial strength of the U.S. economy and how the supply of dollars was regulated.
With the current deficit running higher, the dollar intrinsically is worth less. What is going to happen is that foreigners are not going to want our dollars anymore, so they will stop sending us goods and will begin spending hoarded dollars over here on goods that we have. So its going to be the present situation in reverse. All those dollars that are on deposit in China and Japan and elsewhere are going to come flooding back to the US bidding up the prices of whatever isn't nailed down. All of that inflation we've created for 20 years that the Japanese and Chinese have kept at bay by hoarding our dollars will come back at us like a tsunami. Foreigners will start spending dollars here, and the domestic money supply will shoot up and prices with it.
Ok this is just a brief summary, it would take me weeks to explain EVERYTHING.

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