Who will ultimately pay the price for all the new government bailouts?
*International Business Times, by David Morgan, July 18, 2008:
“It is and has been my very studied opinion that wealth cannot be
printed, and therefore the role of gold and silver at this point in
time comes mainly as a means to protect or build wealth.
Fannie Mae (FNM) and Freddie Mac (FNM) were on the verge of collapse,
only to be saved by the full faith and credit of the United States. But
in reality the Fed did not save them, YOU did. If you are a U.S.
citizen, the bailout has your name on it and you don’t even know it, do
you?
When a financial institution, bank, broker, hedge fund (Long Term
Capital Management) gets bailed out, it is the taxpayer that ultimately
pays for it. The Fed ‘loans’ money to the failing institution and
rewards mismanagement, but the loan is paid for by collecting taxes
from you! How often has your friendly banker asked you to bail out
others that have made poor business decisions? The answer is, plenty of
times, but those who read the mainstream press never get a clue that
the full faith and credit of the United States means simply, the
ability of the federal government to tax its citizens. It is just that
simple!
The U.S. government is coming to the rescue (through you), but is this
‘too little, too late?’ All of this fear is also being fanned, thanks
to statements by Federal Reserve Chairman Bernanke, who told Congress
the U.S. economy is faced with ‘numerous difficulties,’ such as strains
in financial markets, a shaky job market, and ongoing weakness in the
housing market. These difficulties are persisting, despite the Fed’s
massive interest rate cuts and expanded lending efforts over the past
year. Will the Federal Reserve and Treasury be able to save the country
from suffering a massive financial collapse?
It depends. It depends upon what you consider a financial collapse, and
I tend to look at it from a very realistic point of view. On a
case-by-case basis. If you had your entire retirement account with
Enron, then you have had a financial collapse. If you are an autoworker
for General Motors, then you may be feeling a bit unsure of your future.
The only real way to gain an idea of whether this latest move by the
Treasury and the Federal Reserve is going to help is by objectively
asking yourself what currency has survived the test of time. The answer
is NONE; no piece of (government backed) paper has ever stood the test
of time.
However, fear not, because two commodities have stood the test of time
and they are gold and silver. These metals have a 5,000-year track
record of preserving wealth and at certain times enhancing wealth. You
see both of these monetary metals stand outside the entire financial
system and yet are money in and of themselves. They are immune to bank
or brokerage failure, poor management, or even government intervention.
That is the beauty of owning an asset outside the financial system: you
have the peace of mind that some of your savings is safe no matter what
happens.”
*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.
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