Saturday, April 23, 2011

Look at them beans...

Back in my younger days, I often spent time at the home of my good buddy, Stinky Wilmont. When noon approached, Stinky would sometimes ask Mrs. Wilmont if I could stay for dinner. She always replied that it would be okay, and then proceeded to add another cup of water to the bean soup. I remember that on days when there were several neighbor kids visiting, the soup got pretty thin, and the beans got a little harder to find.

Just like watering down the soup, the Federal Reserve is now pumping $200 billion a month into the economy. Of course, the same action that made the soup thinner also makes the dollar weaker. You might notice how many more dollars it takes to fill up your cars gas tank: You might notice that land you could buy for $1000.00 an acre not too many years ago now costs $5000.00 or $6000.00 per acre or more. $300.00 per ounce gold is now $1500.00, and $6.00 an ounce silver is now $45.00.

Maybe you've noticed that 12 ounces of bacon this month costs the same as a pound of bacon cost a few months ago.

Since the Federal Reserve starting "managing inflation" in 1913, the dollar has lost about 96% of its purchasing power. The political party that is in control, regardless of which one it is at the time, likes to deny that inflation is a problem when they are running things.

But I could sure tell the difference when the soup got too thin, and I can tell the difference when my truck's gas tank gets empty.

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