You May Not Be Able To Provide The Basics For Your Family Even If Everyone In Your Family Has A Job

Posted by Ian Cooper - Thursday, January 6th, 2011

From The Economic Collapse:

"Today, millions of American families are extremely stressed out because they are working as hard as they can and yet they find at the end of the month they still haven't been able to pay all of the bills.  Unfortunately, things are only going to get rougher in the years ahead.  The U.S. government has reached a terminal phase of the debt spiral that it is trapped in, and the only way to keep the system going is to print more money, borrow more money and spend more money.  But won't this cause horrible inflation eventually?  Of course it will.  That is why so many people around the world have so loudly denounced "quantitative easing 2".  The Federal Reserve is just creating hundreds of billions of dollars out of thin air and is chucking all of this money into the system in a desperate attempt to get it moving again.  This is also why the Tea Party movement is so angry about the record amounts of government debt that are being piled up.  When the U.S. government goes into more debt, it creates more dollars.  As the Federal Reserve and the U.S. government flood the system with new dollars, it means that there are now more dollars chasing roughly the same number of goods and services, and that is a recipe for inflation.

Fortunately (or unfortunately, however you want to look at it), most of this new money is trapped in the financial markets right now.  The first people that get their hands on all of this new money are banks, financial institutions and the folks down on Wall Street and right now they are hoarding much of it and much of it is going to pump up the stock market.

That is one reason why we saw such a tremendous bubble in commodities in 2010.  It is also a key reason why we have seen such a stock market "recovery".

But eventually all of this new money is going to get into the hands of average U.S. consumers and it is going to start pushing the price of everything up.

So enjoy the relatively tame inflation that we are enjoying for now."

Read more here.

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