America's Glorious Empire of Debt

[katty]

cont'd: http://www.dailyreckoning.com/Issues/2006/DRUS022806.html

America's Glorious Empire of Debt

by Bill Bonner
The Daily Reckoning
Ouzilly, France
Tuesday, February 28, 2006


In a month, we won't be able to know how much money the feds are hoping to steal from our country's few savers...

Looking through Bernanke's big book of economic alchemy...who doesn't like lies - as long as they are flattering?
"There is a crack in every thing God has made," said Emerson.

The truth is that the feds can control either the quantity of the nation's money or the quality of it. At the heart of the world's next - and probably greatest - financial crisis is the sad fact that they cannot do both at the same time. Alas, there is always some catch...some restraint...some skunk in the woodpile. We cannot grow wiser without growing older. We cannot grow richer in the future without forgoing the chance to enjoy our money in the present. We cannot make the Devil's food cake of an expanding money supply without the gooey spoons and burnt pans of inflation hidden somewhere in the kitchen sink.

Next month, the feds will cease reporting the M3 figure. Thenceforth, it will be harder to figure out at what rate the U.S. money supply is expanding. That is to say, it will be harder to know how much money the feds are hoping to steal from the world's savers.

Yes, dear reader, the great American Empire faces the future, not with grace and resolve, but denial, delusion, deceit, and more debt.

Will the Bernanke Fed protect the quality of the dollar, or will it tend to favor the quantity of it? We already know the answer. He has told us himself: he will hire helicopters to drop the green paper all over the country, if it comes to that, just to make sure the quality of the nation's currency does not improve.

[FloridaPat]

1. I remember when * first got in office the gov't was worried about

deflation. That brings prics down. Once upon a time I read a story about the economy from 1800-1900. Lots of inflation and lots of deflation and at the end of the century prices were the same and the dollar was still worth what it was at the beginning of the century.

Fastfoward to 1945. The gov't has been making sure there is no deflation. However, allowing the gov't control over things is like letting the fox guard the hen house. The gov't fights big jumps of inflation, but inflation is good for the gov't. More people are paying a higher percentage of their income to taxes because wages have risen but the tax brackets have been adjusted for inflation. Neither has the per/person deduction. The 1960 dollar today is probably worth less than a penny.