I've always wondered what will happen when LBJ's welfare state meets up with hyperinflation.
Posted on 02/07/2012 4:00:07 AM PST by Tolerance Sucks Rocks
The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.
The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits. In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.
Why target an annual 2 percent decline in the dollar’s value instead of price stability? Here is the Fed’s answer:
(Excerpt) Read more at forbes.com ...
Simple: It’s time to dismantle the Fed, clamp them in irons, and go back onto the gold standard.
I've always wondered what will happen when LBJ's welfare state meets up with hyperinflation.
Payments to groups who will riot (welfare recipients and union members) will be indexed to inflation, and the burden will fall on the middle class.
This is what the Weimar German government did in the early 1930's, until the middle class got sufficiently fed up that they elected somebody who would crush the rioting unions.
The actual rate of inflation is about 7% (Shadow-stats figure).
Which means a 50% devaluation in 10 years - and that’s assuming that the dollar remains the world’s reserve currency.
More likely the reserve status of the dollar will be lost (countries will trade for oil using precious metals instead). This will force an 50% to 80% devaluation of the dollar over the period of about a month.
How will the devaluation be measured?
When compared to gold and some other commodities, the actual current rate is much greater than 2%
That amounts to an inflation rate of 2%.
By the rule of 72, a compounded rate of 2% will halve the deficit in 36 years.
The Fed is organized crime that has taken over the system. They are immune from punishment because they own the government, it’s owners fund both sides to create the illusion of periodic change but they only grow government and further enslave us.
Bump for later.
Check out this Dollar Inflation Calculator and find out how much a 2011 dollar was worth in 1991, 1981, etc.
The market in gentlemen’s goods will soon be saturated with the wheel barrows it’ll require to transport those worthless dollars.
Inflation is a huge tax that robs Americans of their savings, and does a lot of harm especially when it is paired with a lousy economy. Stagflation is what we called it in the 1970’s and 1980.
They used to hang people for TREASON. (after conviction)Here’s another example of what the FED has done in the past 3 months to try and kill the Dollar! http://www.xe.com/currencycharts/?from=USD&to=CLP
Click below the graph “1Y” to view.
'officially' i suppose we havent seen inflation, but in reality, *everything* we buy on a daily use basis has been going thru the roof for a couple years, and especially the last 6-12 months...
the budget, of which the fed doesnt need to live, is wrecked in gilbos house...
Just image what the real ‘real’ (inflation adjusted) GDP is!
Using the pre-1980 methodology its over 10%, which is obvious to anyone who has been to the grocery store lately or filled up with gas. The "official" unemployment and inflation numbers are strictly for political propaganda purposes only. Anyone with half a clue regards them as a form of sick humor.
The Federal Reserve's Explicit Goal: STEAL ONE THIRD of EVERYTHING YOU OWN
There, fixed it.
Since President Nixon formally recognized the Bankruptcy of America on August 15, 1971, they have devalued our Dollar by a factor of 35. In other words it Takes 35 Federal Reserve Credits to One Silver Dollar. And it is only that low because of the shenanigans The Banking Industry has partaken in, It should be around $50 to be on Par with Gold at 35 to 1. Now that is Inflation ie THEFT.
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