Is the U.S. in for monumental inflation and its devaluation of wealth?
*Texas Straight Talk, by Congressman Ron Paul, July 16, 2012:
''The American public now senses that the Fed's actions, especially
since 2008, are enormously inflationary and will cause great harm to
the American economy in the long run. They are beginning to
understand what so many economists still don't understand, which is
that inflation is a monetary phenomenon, and rising prices are merely a
symptom of that phenomenon. Prices eventually rise when the
supply of US dollars (paper or electronic) grows faster than the
available goods and services being chased by those dollars.
This fundamental truth has been thoroughly explained by Milton Friedman
and many others, so today's Keynesian economists have no excuse for
their claims that 'inflation is under control.' Ordinary
Americans don't need a PhD simply to look at the Fed's balance sheet
and understand the staggering amount of money creation that has
occurred in recent years. They know it will have harmful
consequences for all of us eventually.
I've spoken at length about inflation, and how Fed money creation is
effectively a tax. Every dollar created out of thin air dilutes
the value of the dollars in your pocket and your savings in the
bank. But the truth is that we are only beginning to see the
results of the Fed's dramatic increase in the money supply. As
former Fed Chair Alan Greenspan himself explained last week to Larry
Kudlow, most of the dollar deposits created by the Fed via successive
rounds of 'quantitative easing' remain on the balance sheet of Fed
member banks. Because of very rational economic fears, banks are
not lending, businesses are not expanding, and individuals are shedding
debt. So, the trillions of dollars created by the Fed since 2008
remained largely undeployed. When those dollars eventually make
their way into the world economy, prices across all sectors of the
economy are likely to rise dramatically.
The true evil of inflation is that newly created money benefits
politically favored financial interests, especially banks, on the front
end. Over time, however, the net result of monetary inflation is
always the devaluation of savings and purchasing power. This
devaluation discourages saving, which is the key to capital
accumulation and investment in a healthy economy. I nflation also tends
to hurt seniors and those living on fixed incomes the most.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
Call Now
Let us help you:
Personal Advisors
available now at
1-800-444-8317