Money. I can't be making this up.
Today's Zinger:
The Briefing:
- Treasury has authorized purchase of $1 Trillion in bonds that will significantly feed inflation.
- President Obama has proposed $1 Trillion in additional spending in his budget.
- The Federal Government has spent $2 Trillion in bailouts and stabilization.
- Our economy and country is threatened and requires each of us to take action.
Background:
Late yesterday afternoon, for the first time in over 40 years, the US Treasury has authorized the purchase of Treasury Bonds. How much-- $ 1 Trillion. Every American needs to batten down the hatches because a great storm is gathering. We are about to play craps with the American economy.
In an effort to deal with the recession, the US Treasury has used up it's economic leverage to stimulate the economy through interest rates. Rates are essentially at zero. (0). The Federal Government has passed an $800 Billion stimulus bill to inject new spending into the economy. It has issued over $700 Billion to stabilize the financial markets and there is talk of additional spending. The Government has also issued corporate bailout money in excess of $1.2 Trillion. Add it up and we have increased our spending/debt/commitments by almost $4 Trillion.
Implications:
Buying Treasury Bonds is the equivalent of printing money. Increasing the money supply while there is no increase in the production of new goods and services is called Inflation. There has been a doubling of the money supply since President Obama has taken office. In addition, taxes are being raised and social programs (which will require additional Government spending) have been proposed. Unemployment is continuing to increase, wealth has been destroyed (-$11 Billion in the past year). Our government does not believe there has been sufficient change to stabilize prices and the overall economy or they would not have authorized the purchase of Treasury Bonds. This latest move by Treasury is the canary in the cave indicating a toxic combination.
This is unprecedented. The Treasury will have a delicate balance to manage. Most likely, the Treasury is trying to avoid deflation. The continued decline in prices, as a result of the economic recession, can be one of the most devastating conditions. The addition of $1 Trillion dollars will provide an offsetting inflation. The balancing act requires Treasury to end the influx of money before we go into hyper inflation. It requires incredible anticipation with something that has never been done. This is incredibly risky.
What Should We Do:
We all need to get far more involved in our government. As a way to build support for his agenda, President Obama recently asked neighbors to talk to neighbors about his proposed budget.
Well, I would like to do just that. President Obama has proposed over $600 billion in "pre-spending for health care". That means that he is going to stash away $600 billion for future spending. Secondly, the budget incorprates an 8% increase in general spending. I don't know about you but everyone I know is slashing spending in these difficult times. This massive budget increase ($1 Trillion), combined with bailouts ($1.2 Trillion), and stimulus ($800 billion) is staggering. Combine this with the Treasury money supply increase and we are left with $4 Trillion in just a matter of months. I can't support this budget.
We as citizens of this country need to be concerned for our future and our children's future. For those that want to blame our current situation on "the failed policies of the Bush Administration" I would ask, does it matter who's at fault. If we lose, we will all be in the same place. Now is the time to stop partisan bickering and be American. Look at what is going on and take a stand.
Please contact your Congressmen and tell them you have had enough. We need to stop the insanity and focus on the economy. Stop villainizing business and Wall Street and get this economy moving now.
I would also ask that you let President Obama know that he needs to focus on business. He is currently acting like celebrity President. Making book deals, worrying about the NCAA basketball tounament, traveling to California (worrying about batteries and solar energy), appearing on Jay Leno. Stop it. Encourage business and ownership, free up more money in the financial institutions (but this time lets put restrictions on the money) and get this country moving again. We all have a lot to lose if he fails. Let your voice be heard.
How to contact President Barrack Obama President@whitehouse.gov
To contact your Congressman https://writerep.house.gov/writerep/welcome.shtml
Time to "button" down the hatches? Now I'm really worried. Must be steering a lightweight vessel there.
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