
As you can see from the Chart above from Wealth Cycles, deflation (the amount of currency in the market) has hit the United States.
No one is telling you this but the United States is in a period of massive deflation. Due to defaulted loans as one big reasons, the currency supply is contracting. Commercial banks holds a lot of these loans. So as the money supply contracts, as unemployment continues to stay high, commercial banks will see more loan defaults and more of a contraction of ther money supply. This means they are losing wealth. Deflation has been averaging $50 billion a month in the first half of 2012.
To combat this deflation and a further erosion of their wealth, the Fed has launched two more rounds of Quantitative easing the past few months. QE as this is called is simplying more money printing to offset the delfation caused by the poor economy.
The Fed has also implemented its Zero Interest Rate Policy, or ZIRP. The Fed is manipulating interest rates to near zero with the theory that it will encourage more borrowing and make more currency and debt. More debt just increases the supply of currency via fractional reserve banking. Yes, the Fed wants us to borrow and get in debt more so their banks have more assets.
If you keep printing money at a rate greater than deflation, eventually this will devalue the currency. That means those of us who are paid in this currency and those of us who save in this currency will have their purchasing power reduced. That is the Fed's intenion. To keep making money for themselves by robbing it from you through devaluing your currency.
When will this madness end. There is only two ways for it to end. Either, their currency fial system collapses or the people in charge have to be kicked out and replaced by someone better. As long as the people keeping voting in politicians (mostly Democrats) who support this swindle, the collapse will inevitable come and soon. But, if the people smarted up which did not happen in the last Presidential election, we could see politicians who see this system for what it is, a big swindle, and being dismanteling it one by one.
My feel is that the US economy as a whole and those who don't understand what is happening, will have to go through a lot- and I mean A LOT MORE PAIN - before real meanigful change actually starts to happen.
In the mean time, I hope you remain patient and Sit and Grow Rich. That is, you play it smart and transfer as much as possible out of fiat currency and into real money, gold and silver.
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