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To: RKBA Democrat
For the past three months, the money supply has been collapsing due to cash hoarding by those who no longer trust the solvency of our biggest financial institutions.

The Fed is in full panic. Their efforts have had no effect to reverse what is rampant DEFLATION of the money supply, ie no new debt (money) is being created. The fiat money machine is now running in reverse and will soon reset to zero.

Cash is king. A very foreign concept to a debt ridden society. And did I mention that it is dangerous to be in debt up to your eyeballs when cash is gaining in value after a 25 year period of inflationary expectations ?

30 posted on 02/16/2008 4:54:38 AM PST by Vet_6780 ("I see debt people")
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To: Vet_6780

“The Fed is in full panic. Their efforts have had no effect to reverse what is rampant DEFLATION of the money supply, ie no new debt (money) is being created. The fiat money machine is now running in reverse and will soon reset to zero.”

Interesting take on it. I think it will be a surprise for the political leadership when this “stimulus” payout is not spent by a lot of the people who receive it. Add to that a continuing contraction in consumer credit and things get down right deflationary.

Gosh..you know it turns out that people who are in hock to their eyeballs are actually credit risks.


45 posted on 02/16/2008 6:14:54 AM PST by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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