Wednesday, May 13, 2009

Stop Fucking With Our Money!!!


Asking questions can be as important as having answers. In fact, answers to the wrong questions is of no help either.

Let us start with the most basic question, Why do we need money? That seems pretty simple on the surface, we need money to purchase goods and services. Who prints our money? The Federal Government prints our money, but if our money became worthless, other forms of money, or other foreign currencies would take its place. Who influences the expansion or contraction of the money supply? The Federal Reserve Bank using the levers of monetary policy influence the expansion of the money supply. Inflation is the reduction in purchasing power of our money. The Federal Government can trigger inflation by printing too much money, or, restricting the production of goods and services, thus causing the cost of goods and services to go up in price.

When there are repeated years of inflation of the money supply and prices keep rising for goods and services, the psychology of saving money goes from savings accounts are a good idea to “cash is trash”. When inflation is really bad, people spend their money as fast as they get their hands on it.

Where does credit come in? Credit enables people to spend future earnings for goods and services before inflation raises the price level of those same goods and services. Credit in the form of cash, also known as demand deposits in your checking account, can further the expansion of the money supply as commercial banks once creating a new demand deposit can create more credit and further expand the growth of the money supply.

Yet the reality remains that money needs to be put away for retirement because Social Security alone will not take care of anyone in 2009. Therefore, we invest our money in pension funds, IRAs and 401-ks and the like. If we measure inflation over a period of 40 years in the United States, it becomes quite clear that saving money in a money market fund for retirement will not give us the total rate of return that would permit us to maintain the purchasing power of the dollars we saved 40 years ago. As a result, investing becomes a significant piece of the security puzzle that everyone is trying to obtain.

The Federal Government that formulates FISCAL POLICY, through Congress and the administration, MONETARY POLICY, through the Fed, and the budget of the Securities & Exchange Commission through the Congress, is suppose to have the responsibility for protecting the U.S. Dollar and the investment arena for all the people. They have fallen down on the job miserably. Look around, no one in Congress is out of work. The prior administrations have failed the people and this administration has not shown us that there is going to be the changes that are needed to correct the arrogance, the corruption and the frauds permitted to occur on Wall Street. I call for a Glorious and Bloodless Revolution. It is time for regulation, oversight, transparency and enforcement of the laws and the creation of better and more comprehensive laws to deal with the investment game in the 21st century here in the United States. Our battle cry to the Congress and the administration should be loud and to the point. “STOP FUCKING WITH OUR MONEY!!!”

Stay tuned.

1 comment:

Unknown said...

I could not have said it better, myself.