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Great Depression Online Archive Issue:

Betting On A Trifecta

Great Depression Online
Long Beach, CA
January 22, 2008

Inside This Issue You Will Discover…

*** Betting On A Trifecta
*** The Alchemy Of A Stimulus Packages
*** Debt Review
*** And More

“Things must be as they may.” - William Shakespeare, Henry V

Betting On A Trifecta

We see that December retail sales were the weakest since 2002.  That, coupled with rising job concerns, rising energy bills, and rising home foreclosures…it seems the risk of recession is rising too.

And as the economy slows in the early part of 2008 the American populous is betting on a trifecta.  What choice do they have?  The circuses are many, with American Idol and NFL Football, but the bread has become scarce.  How can one be any fun without the other?

The people want it.  And their government wants to give it to them.  For where politics and money mix along the banks of the Potomac River gathers a cast of characters that not even William Shakespeare, the master playwright, could have dreamt up.

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Here we’ll introduce the leading cast…the big three…the trifecta, if you will:

* George W. Bush, President

* Ben S. Bernanke, Federal Reserve Chairman (appointed by Bush)

* Henry M. Paulson Jr., U.S. Treasury Secretary (nominated by Bush)

The latest scene in the latest comedy is reported to us by Andrew Taylor of the Associated Press, on January 18, 2008.

“President Bush, acknowledging the risk of recession, embraced about $145 billion worth of tax relief Friday to give the economy a ‘shot in the arm.’

“President Bush is calling for an economic stimulus package centered on tax cuts and rebates while Congress works on a broader package that includes aid targeted to the poor and unemployed.

“‘What he believes is that we've got to do something that is robust.  It’s going to be temporary and get money into the economy quickly,’” Treasury Secretary Henry Paulson said Friday on CBS’s ‘The Early Show.’  ‘It’s going to be focused on consumers, individuals, families -- putting money in their pocket.  And it's going to be focused on giving businesses the incentive to hire people, to create jobs.’

“Federal Reserve Chairman Ben Bernanke entered the stimulus debate Thursday, endorsing the idea of putting money into the hands of those who would spend it quickly and boost the flagging economy.

‘“Putting money into the hands of households and firms that would spend it in the near term’ is a priority, he said.

“Especially important is making sure a plan can put cash into the hands of poor people and the middle class, who are most likely to spend it right away, he said…”

End Scene

The Alchemy Of A Stimulus Packages

If you’re not familiar with what a stimulus package involves, we’ll try to take the mystery out of it for you.

First we must recognize that it is a bit mysterious.  And that it involves modern alchemy.  So here we’ll make a quick digression into clarifying what alchemy is and who it is practiced by…

Alchemy is an enduring profession that includes creating elixirs of life, refining snake oil, transmuting common metals – such as copper and lead – into gold, and many other grand hallucinations of man.  Alchemy has been practiced throughout the ages by varying degrees of quacks, swindlers, and charlatans.

In summary, alchemy is the practice of creating something from nothing through deception.

Back to the stimulus package…

When we look at what is proposed as the stimulus package, we see “tax cuts” and “rebates” with the goals of “…putting money into the hands of those who would spend it quickly” and putting “…cash into the hands of poor people and the middle class, who are most likely to spend it right away”.

How gallant…noble…and righteous it all seems.  And we’ll admit it – We love tax cuts.  But there seems to be one sticking point that we can’t get past.  And that is: Where is the money coming from?

Maybe we’re just radical stick-in-the-muds for wondering.

Debt Review

But the last time we checked, the National Debt had topped $9-trillion.  Assuming a U.S. population of 300-million, each citizen’s share of the debt is about $30,000. 

So if we’re that deep in debt, where is the cash that’ll go “…into the hands of poor people and the middle class…” so they can “…spend it right away” going to come from?

You know the answer.  It’s going to be created out of thin air through the modern alchemy of central banking.  In short, the Federal Reserve will borrow it into existence and lend it to the U.S. Treasury. 

You may even find a tax rebate check from the U.S. Treasury in your mailbox.  And we’ll all pay for it – and all the others  – through inflation.

We do hope the populous enjoys the stimulus money and spends it wisely while the fun lasts.  But then what… 

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  If you truly want to understand what inflation -- and its end result hyperinflation -- does to society.  And if you want to have the knowledge to survive the impending inflationary recession, you can learn more here: Surviving the Next Great Depression -- Unknown Secrets from The French Revolution.

 

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