When the Government dilutes the money supply by printing fiat currency, the result is inflationary.
In the case of the Federal Reserve , the printing presses are running so fast and furious, that they have already worn out 2 sets of printing presses in the 3 years of the Obama reign.
The inflationary pressures are a constant push on prices and a depressant on the purchase power of the American dollar. It takes more and more dollars to buy less and less items.
Anyone who is responsible forgoing to the grocery store, realizes that the same number of shopping bags, now cost more almosrt weekly, and they also note that much of the packaging has been changed to shrink the amount in the package , while attempting to hide behind a larger box or other creative packaging.
Yesterday, the Government announced an increase of 2.5% in Gross Domestic Production(GDP) for the 3rd quarter of 2011.
That announcement coupled with the European bail out of Greece (another fiasco, that will result in more and more bailouts, and more and more unbacked paper currency in Europe..Inflation is a many splendid thing..or not!) , sent the stock market soaring.
It always suprises me, that the so called sophisticated traders and investors can misread the news so dramatically.
The inflation that is creeping into our economy makes everything more expensive, resulting in more spending for the same items. Hence an increase in GDP….What? We are being burried under paper, our standard of living is dying one paper bill at a time, and the world rejoices at the wonderful news.
No double dip recession, the economy is growing!
No default in Greece, the presses are working overtime around the world.
The real tragedy of this fiscal disaster is that there is abundant paper and ink. Perhaps the presses will overheat and refuse to continue printing, or perhaps society will decide that accepting printed paper in exchange for food and shelter is a bad idea,-