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The Effects of Inflation and Debt

Pushing the U.S. Dollar Lower and Gold Higher

Written by Brian Hicks
Posted April 21, 2009

Most Americans are in absolute denial regarding the state of the U.S. economy and the effects of inflation and debt.

And the fact is, they want to believe in the fantasy and deceitful optimism the powers that be are pushing down our throats. They want to believe fairy tales above truth. They want to believe the carefully engineered system of lies that the U.S. government and Federal Reserve are advertising.

But they are about to find out just how high the costs are for their complacency, lack of understanding, and apathy.

Before you read on, let me warn you, this is not a pretty picture. . .

The Effects of Inflation and Debt on the U.S. Economy

"Big Ben" Bernake, his corrupt organization, and the U.S. government don't want you to understand what's really going on with the American economy.

They purposely use cryptic terms and phrases which are over the average person's head. We can thank the American education system for this.

This is the modus operandi for the elitists who own and control the Federal Reserve and is another reason why "We the People" need to purge this central bank scam from our country.

If you're looking for proof of just how out of control things are in Washington and New York, just consider how the American elite are trying to buttress the crumbling U.S. economy.

The Federal Reserve recently pledged to purchase as much as $1.15 trillion in U.S. Bonds and mortgage-backed securities to "encourage lending." In effect, the Fed is buying more U.S. debt.

Why?

Because other countries don't trust U.S. debt anymore!

We always knew this day was coming, and we here at Gold World have written about it many times before. But the stinging reality that this moment is now upon us is truly frightening.

The government will be forced to continue printing money to make sure there is enough to continue buying U.S. debt. This will lead to massive inflationary pressure. And the effects of inflation will catch up with us sooner than later.

This is their last ditch effort. There is nothing left to try or do. Either this scheme works or the whole thing goes up in flames.

The Federal Reserve will create whatever amount of money is necessary to pump up the U.S. economy and avoid going into a hyper-deflationary panic and ultimate disaster.

Of course, it's very unlikely the gimmick will work.

Rather, the only thing it really does is ensure hyper-inflation. This is why we here at Gold World have been saying, for over a year now, that governments worldwide and their central banks are completely incapable of preventing what is coming. Try as they will, in the end all they will have accomplished is buying a little more time and making the consequences much worse than they needed to be.

Cash will become trash over the next six months or so. I doubt we'll make it through the end of the year before things begin to really unwind. I now expect the U.S. dollar to resume its downward trend before the ultimate death spiral of the greenback, which will probably occur sometime in 2010.

What U.S. Inflation Means to Gold Investors

Fortunately, this hyperinflation will be incredibly good for gold and silver investors, since precious metals have done best during times of rising inflation.

As the value of the U.S. dollar drops, people will become desperate to have a store of value. And on the pyramid of stores of value, gold is the capstone.

Most of what's happening out there right now is out of our control. But we can concentrate on how to make money out of this predictable debacle and save ourselves and loved ones from unnecessary suffering.

You still have time to make your preparations, but the sand in the hourglass is quickly running out.

Review your current situation and focus on what you can do, not what you can't do. Small amounts of money placed in the right situations may make all the difference in the world to you, your family, friends, and loved ones.

Link up with other like-minded people who understand. In my opinion, all of us will need to rely on others more than we ever have.

Review the list I gave you a few weeks ago in my "Financial Crisis Investing" article and see where you are deficient. Having something tangible is better than ending up with a bunch of worthless paper money.

Good Investing,

Greg McCoach
Editor, Gold World
Investment Director, Mining Speculator

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