US Government is Monetizing Its Own Debt by Simply Printing Paper Dollars



toliet-paper_cI don't even know where to begin, except to say...Historians will mark down yesterday, March 18, 2009, as the day the Federal Reserve thrust a dagger into the heart of the U.S. dollar. The dollar is now lying on its death bed bleeding to death with the blessings of the Fed doctors watching over it.

Jim Lynn

Yesterday's Fed announcement that they would buy $300 Billion in U.S. Treasury Bonds and over $1 Trillion in government held mortgage backed securities, should remove all doubt as to the fate of the dollar. The announcement means the U.S. government is monetizing its own debt through the Federal Reserve System by simply printing paper dollars to pay its own debts.

Normally, when the government borrows money by issuing bonds, foreign countries put up the money for the bonds, expecting a return on their money with interest. However, because our government has created so much debt (more than the combined worth of our country's assets) no one is willing any longer to buy Treasury Bonds. That is because we (the U.S.A.) have become the world's largest debtor nation, and are at big risk that we could ever repay our debt. The world fears the U.S. government will default on all its debts. Egad!!!

So, to keep the system afloat, our government is now printing its own money to pay its own debt. Isn't this wonderful? The U.S.A. from now on whenever it needs more money will just print more paper dollars. Gee, don't you wish you could do that...just print money?

Here's what all of this means to you and I

First, get ready for a flood of paper dollars. The theory is by flooding the country with paper money, it will stave off a depression and put more people back to work. That is the theory, but no one really knows if in fact the theory works, or for how long.

Secondly, as ever increasing amounts of dollars begin to make the rounds through the banks, businesses and into people's pockets, everything we buy will cost more. At first, it will not be too noticeable. But about 12 months from now, expect prices on everything you buy to begin inflating in price up to as much as 50% and more...much more!

Hard assets, like silver and gold will soar in price as stated in dollars.

The dollar, which devalued 250 Basis Points (a huge amount) against foreign currencies after yesterday's announcement, will continue to lose value. Stock prices will move upward as will 401K's and other paper investments, that is at least for the short term. After a time, the stock market will tumble down to maybe as low as 500 in the Dow Jones Industrials.

In order to save the world from total economic collapse, a new currency will replace the dollar. Those left holding dollars and any paper assets like bonds, mutual funds, etc. will see their value go to zero.

Those who have studied the Fed and our worthless dollar, have wondered how the final chapter in the death of the dollar will unfold. There were several possibilities. However, with yesterday's announcement, how the last chapter will read is now known...Hyperinflate the dollar (print money like mad) in hopes of paying off an impossible, unpayable debt.

What you should do

Our own government is out of control. Everything it does to stop a depression only makes the situation worse.

Get informed and think for yourself. Think through what will happen as the economy worsens. Take action to protect yourself and family. Talk with your family and make a plan. Think about food, water, home security, finances, medicine, etc. and begin a program to insure you can survive a total collapse of the dollar. Discuss the dollar collapse with your neighbors, work together as much as you can and be there for one another.

Yesterday's Fed announcement is historic. It should be to you as the sound of the starter's gun in a race. Those who refuse to run, those who remain milling around the start line, are fools to ignore the loud and clear sound of the gun. They will all be the losers.

Prepare for the worst, and pray for the best.

Add comment

Security code


Your best fast-food restaurant is