Inflation and insolvency are hacking away at the markets. The federal government keeps throwing taxpayers’ cash at the banks, flooding the banking system with as much ‘free money’ as they can, so long as it keeps the financial system in some semblance of order.
The whole system is a giant mess. We’ve got:
· Negative inflation—adjusted interest rates;
· Soaring global inflation;
· A weak U.S. dollar;
· A fractured financial system screaming for more government assistance;
· Soaring food and energy prices;
· The contraction of bank credit;
· A deepening economic recession in quarter 3; and
· A housing catastrophe
· And finally — a big global bear market in financial assets or stock and bonds.
We all know the government’s “rescue strategy” isn’t working. All the Fed and the Treasury are doing is deflecting another larger and more unstoppable crisis down the road.
Our government is spending your tax dollars to bail out greedy fat cats and reckless speculative institutions—simply because they’re so big. As Eric Roseman, a member of the Oxford Club’s Investment Advisery Panel says, “[The U.S.] will have to finance these and future bailouts with enormous amounts of credit, mostly from taxpayers. It’s inevitable that all this credit will eventually drain on the economy.”
Despite the Fed’s efforts, eight financial institutions have still failed—and many more are teetering on the edge. It would be naïve to think that more banks won’t fail.
There is tremendous amount of energy and oil consumption, far outweighing production.
According to RLC Adviser and U.S. Congressman Ron Paul, “History has shown that fiat money, or ‘faith-based currency’ always fails, because when governments claim this power, they always behave irresponsibly.” History shows that when one major currency goes bad, it can drag everything else down with it. For example:
· Latin America literally saw its currency crumble in the inflation—wrought 1970s and 1980s;
· Asia experienced a total wipeout of currency values in the late 1990s; and
· Russia devalued and crashed in 1998 while many other units plunged in value over the last 35 years, including Turkey, South Africa, Iceland, Scandinavia, India, Pakistan, Sri Lanka, the British pound, the Italian lira, the Balkan currencies;
Many are mistakenly pointing their fingers at the free market as the culprit behind our current economic plight. Make no mistake: Status quo U.S. economic policies are not market-based policies.
Those in charge believe in monetary inflation, which Dr. Paul refers to as “the technique used to pay for the regulatory-state and the costs of policing the world.”
The bottom line is that the free-market is not to blame for our current economic woes. We need a return to market principles if the government is going to get itself out of this mess.
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