Could They Stop?

Government is inherently stupid, greedy, and self-serving.

We all know that the more bucks they print, the less they will be worth, and the higher prices will go for everything bought with dollars. Shouldn't we be upset when government gives dollars away like it is a huge Monopoly Game? A billion here, $500 million there, a few hundred thousand over yonder, and pretty soon you are talking about a lot of dollars being printed, and checks being written. What can we do to stop the government from giving away our tax dollars? Nothing. Can we vote the creeps out of office and replace them with fiscally sensible representatives? No, because the Republicans spend as much as the Democrats, hence the term "Republicrats." While the Libertarians are correct, they will never make the grade. Politicians all want to be re-elected, so they fill the public trough for everyone to eat at, regardless of race, nationality, or location. Israel gets over a million a day, plus other "benefits," and the presses just keep rolling.

Our taxes barely pay the interest, and so far, tax receipts are down 19% for this year. Is this the "recovery" CNBC speaks about, like all good little government stooges? Additionally, millions every year simply drop out of the system, and cease even filling out the forms. It is estimated that 57 million have done so. Tax receipts are down, but government is on an economy binge, correct? Hardly. Interior Department spending is up 33%, State Department 23%, foreign aid 16%, Energy Dept 15%, Dept of Justice 16%, etc. In addition, Army spending is up 18%, Navy 16%, and Air Force 20%.

All spending by government is classed as part of the GDP (gross domestic product). You thought that just spending at China Marts, the neighborhood super market, and new car dealership was what the GDP was about, didn't you? Wrong. Government can spend us into bankruptcy, and as a matter of fact it already has; and the GDP will go up. And you thought World Com, Enron, and the Veep's ex company, Halliburton, were the only ones that cooked the books. Not so, Gertrude. The federal government, not only has probably the most cooked books in history, but it can't even account for hundreds of millions of dollars. None of the government agencies can balance their checkbooks. The almost total waste and miss-management of the United States Federal Government is so appalling, that future history books will liken us to a black comedy, or a huge joke. Checks are drawn, and dollars printed with gleeful abandon, and there is not a single urge to balance the books or watch what is being spent. Congress votes to "raise the national debt" each year, but that is a charade, because no one knows how much is spent, or where it goes.

Like a runaway truck going down a mountainside, with burned out brakes, the end of the road will arrive eventually, and there will be monumental damage. In the 1940's, there was a long hill going down into Baker, California. The hill is still there, but it has been made milder, and Baker is off the main road now. Sometimes a truck would loose its brakes, and go roaring down the grade with horn screaming, in hopes he could get through town without crashing, and stop on the hill on the other side of town. Some didn't make it, and some did. The hill stopped the trucks, if they could get through town in one piece. There is no hill for the runaway federal government. Stop the spending, and chaos would result. Like the runaway truck, it is impossible to stop.

The end result will be horrendous, but it can't be avoided. Spending can be slowed, possibly, but the inflationary spiral, once it has begun, can not be stopped, regardless of shallow promises by candidates, or honest intentions by those who would try. What is happening, instead of balancing the budget, is an ever faster grinding down of those with dollar denominated savings devices. Stocks have been a savings instrument Americans have used for many decades, but the stock market now is in a shambles, with trillions lost, and bottom not anywhere in sight, as far as I am concerned.

Every single human in America, pays about a 10% hidden tax every year, because that's how fast the dollar is currently declining in purchasing power. This is known as inflation, regardless of what the nitwit professors may say, and it is caused entirely by printing those bills, and writing those checks. Everyone pays, and no one is exempt. There is no possible way to stop it, as America would crumble if they did. Whenever there is inflating of a currency, there always is an increasing shortage of bills, because they don't buy as much, and more and more are required, just to live. The presses escalate their output as a result, and the process increases in velocity as time passes.

In Germany, in 1924, it took a wheelbarrow of notes to buy a loaf of bread…eventually…and then the whole thing collapsed. American dollars haven't collapsed, but their purchasing power has declined by probably two thirds in the last 25 years. Its decline can only continue, because no one knows how to stop it. The future is writ large, and it is unavoidable. Those gold coins and silver rounds and bars will continue to go up in dollars, as will bread, tires, suits, and autos. There may be a few things, due to oversupply, which will actually decline in dollar prices, such as gasoline, and computers, but it is only a fluke, and will not last long. The decline is written in stone. Not only is the dollar in fatal decline, but so is every other currency in the entire world.

As usual, the masses will be victimized, and not know what hit them. They already have a vague, uneasy feeling, and knowledge that "things are getting tight," with wages going up slower than the buck is declining, as has been happening steadily of late. The feds can only hope the 10% a year decline can be maintained, because if it gets on a runaway mode, the collapse will be a nightmare. 10% a year, few know what is actually happening, and the economy can continue for a bit longer. It cannot continue forever. Collapse of an inflating economy is an absolute truism. The unpredictable thing, is the time factor, not the result.

When the stock market actually reaches "bottom," with the Dow maybe under 4,000 and the NASDAQ at perhaps 500, or the PE ratios are at a decent 10-12, it may be logical to buy stocks. Not now. I think there will be a real estate crash of sorts, so I would not buy land or speculate in real estate either, just now. Saving in dollar denominated instruments is a definite no-no now, and I just cannot think of a single thing to save in, other than precious metals. I know that may sound biased, but I am so honest I squeak, and I just can think of nothing better than gold and silver. I have really searched, and can find nothing. Antiques for use are wonderful, as are old cars, as a hobby, but I wouldn't fill up my warehouse with them. All the available dollars will be used just to live, with no spares. I've got antiques, old cars, original art, an old house, and I love them all, but know that when it all comes down, they would be difficult to sell, because no one will have spare dollars to spend. This thing, as it progresses, will hit everyone where it hurts the most, and I mean rich and poor.

Does Greenspan, a former close friend of Ayn Rand, know what the eventual outcome of this will be? Do the politicos know they cannot stop spending? I believe they do. The end result of an economic collapse is well known, as it has happened dozens of times in history. They know, but are desperately trying to forestall it for as long as possible. Greenspan is an old man, and if he can just keep it going till he's dead and gone, he will be lucky. Everyone's trying, but everyone knows that history always repeats itself. The end is foreordained, and difficult for even us, who are knowledgeable, to fathom, it will be so bad.

When an economy collapses, or even goes into an advanced inflating process, no one is safe, because all businesses will hurt. The currency priced goods required to live, will escalate in price daily, causing every business to slow, or stop and become worthless or at least unprofitable. Barter will be common. This whole scenario sounds dreadful, I know, but it is based on economics, history, logic, and common sense. How can government slow spending? It simply can't, without riots, extreme violence, and mayhem. If there had never been welfare, with the resultant worthless hoards that will do the violence, it possibly could have been avoided. If there had never been foreign aid, it would have slowed a lot. If the currency had never been inflated, but been backed by gold and silver, which would prohibit inflating, it would never have happened, but all of the above have happened, and it's too bad, but we're into this mess, and the only way to survive is to (as usual) PROTECT YOURSELF!