As the debate over the nationalization of health care rages on—and rightfully so, we must not lose sight of the many other proposed policies and plans being put in place right beneath our noses as we focus mainly on that single topic. Indeed, while all eyes are on the value of extending granny’s end of life care and comfort versus ‘slipping her a mickey’ in order to save a few bucks, the forces of big government march forward apace. What, you haven’t noticed? Of course you haven’t—because they don’t WANT you to. That’s the whole idea– by the time enough people finally wake up and finally get a load of what all the promised “change” really meant, it will be too late. Those who would strip the founding principles from our Nation and replace them with their own radical ideals will have won. Freedom and liberty will be quaint-sounding words that will have no meaning in the new America.
One way in which large numbers of Americans could lose their freedom by default is via economic collapse. Let’s face it- in a situation of hyperinflation, ordinary hard working folks will suddenly find themselves without enough means to sustain themselves as it takes more and more cash to pay for everything. Recall last year’s extreme spike in gas prices and what it did to peoples’ budgets. When the cost of putting gas in a car or truck needed to get to work and everywhere else suddenly doubled, it immediately put a severe strain on being able to maintain life as everyone knew it. Without that extra fifty to a hundred bucks or more a week, life was dramatically altered. Imagine that same scenario playing out not just on energy, but on EVERYTHING we buy.
Surprisingly, the opposite of massive inflation, “deflation,” can also be just as harsh, albeit in different ways. FreeDictionary.com’s financial dictionary informs us that
“Deflation, the opposite of inflation, is a gradual drop in the cost of goods and services, usually caused by a surplus of goods and a shortage of cash. Although deflation seems to increase your buying power in its early stages, it is generally considered a negative economic trend because it is typically accompanied by rising unemployment, falling production, and limited investment.”
A logical result is that taxable situations decline, causing revenues into the Treasury to fall. Quite naturally, this leaves less funding to pay for government and all its services. In the absence of any reductions or cuts, taxes must be raised, or monies must be borrowed. What happens when they do both?
Consider some news you might have missed. As President Obama and his statist comrades seek to add untold costs to a federal budget already drowning in debt and red ink by scheming to provide health care for all, everyone forgets the 800 pound gorilla already in the room: a badly damaged economy getting worse by the day. Never mind whether it can withstand the added expenses of new health care spending—even without, we may be looking at a huge problem. “But Doug—I heard on the news the other day that there is a light at the end of the tunnel. The recession is over, and it is thanks, in no small part to all the stimulus spending!” Do you always believe everything you hear? Sometimes you have to dig a little deeper… you know, get BEHIND the facade that those with an agenda see fit to create.
Tuesday’s U.K. Telegraph featured an informative story with this headline: “US credit shrinks at Great Depression rate prompting fears of double-dip recession” Hmmm. So much for that light at the end of the tunnel, I guess. Could it be that it is the headlamp of an oncoming freight train?
International Business Editor Ambrose Evans-Pritchard lays out the cold, hard facts:
“Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.”
“Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14 percent in the three months to August (from $7,147 billion to $6,886 billion). ‘There has been nothing like this in the USA since the 1930s,’ he said. ‘The rapid destruction of money balances is madness.’”
The Telegraph piece continues, with Ambrose-Pritchard reporting this ominous note:
“The M3 ‘broad’ money supply, watched as an early warning signal for the economy a year or so later, has been falling at a 5 percent annual rate.”
Looking up “M3”, I learned that in the Federal Reserve System,
“M3 includes all physical currency and deposits in checking accounts, deposits in savings accounts, certificates of deposit, institutional money market accounts, repurchase agreements, and other large liquid assets that do not circulate very often.”
You could say, simply, this is the value of peoples’ overall savings.
Interestingly,
“M3 includes money that circulates very little or not at all and, therefore, the Federal Reserve no longer calculates M3 when determining the money supply. However, it is useful to some economists seeking to determine the entire amount of money in a given economy.”
Given that the Obama Administration and their mainstream media cheerleaders would have us believe the economy is poised for recovery, ready to assume the future burden of astronomical health care spending and other socialized efforts, is it not unwise to try to discern what the future holds?
Ambrose-Pritchard has found that apprehension is not limited to a lone numbers- cruncher acting like some Chicken Little.
“Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an ‘epic’ 9 percent annual pace, the M2 money supply shrank at 12.2 percent and M1 shrank at 6.5 percent. ‘For the first time in the post-WW2 [Second World War] era, we have deflation in credit, wages and rents and, from our lens, this is a toxic brew,’ he said. It is unclear why the US Federal Reserve has allowed this to occur.”
M1 and M2 are further measures of the supply of so-called “liquid” money assets of the United States.
Now, I’m not much of an economist, but let me see if I can get this straight… We all know that the US is borrowing money to fund the largest and fastest-growing deficit in the history of the world at a pace never before seen, getting loans from places like communist China. At the same time, there is an ongoing contraction and vanishing of monies at a rate not witnessed since the Great Depression. In a nutshell, we’re borrowing monies that will have to be repaid at some point, while at the same time, the money we DO have is vanishing at an astounding pace. What happens when these two lines on the financial chart intersect? When we cannot pay up, how does that work? Will China send “Knuckles” Chang to collect? Not to worry, though– I’m pretty sure government healthcare covers broken legs…