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It is a slow day in the east Texas town of Longview. It is raining, and the little town looks totally deserted.
Times are tough, everybody is in debt and everybody lives on credit.
On this particular day, a rich tourist from the East is driving through town.
He enters the only hotel in the sleepy town and lays a hundred dollar bill on the desk stating he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks up the stairs, the hotel proprietor takes the hundred dollar bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to pay his debt to the pig farmer.
The pig farmer then takes the $100 and heads off to pay his debt to the supplier of feed and fuel.
The guy at the farmer's co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has lately had to offer her "services" on credit.
The hooker runs to the hotel and pays off her debt with the $100 to the hotel proprietor, paying for the rooms that she had rented when she brought clients to that establishment. The hotel proprietor then lays the $100 bill back on the counter so the rich traveler will not suspect anything.
At that moment, the traveler from the East walks back down the stairs after inspecting the rooms.
He picks up the $100 bill and states that the rooms are not satisfactory, pockets the money and walks out the door and leaves town.
No one earned anything. However the whole town is now out of debt and looks to the future with a lot of optimism.
That, ladies and gentlemen, is how the United States Government is conducting business today.
What do you think....
(Author Unknown)
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Now...
One might think that though the story is interesting, but how does it related to the real world?
See...
The rich tourist is the FED, it printed the money and circulate it around and eventually goes back to him through various methods... Such as all kind of taxes that you already known, plus the invisible one-->the inflation. “Inflation is taxation without legislation.”--Milton Friedman.
And after that what happen?
There will be $100 more in the Money System.
When the FED keep doing this, they will be more and more money in the system.
(As show in Picture one... Money Supply Keep Increasing in an exponential rate!)
While the products or services can not keep up with the rate of increase...
(As show in Picture two... Depletion of finite Natural Resources, such as energy, clean water, farm land,etc., keep reducing.)
=> The Buying Power of Money keep reducing or so called Hyper Inflation.
(As show in Picture tree... Relationship of Value of Dollar Vs Money Supply.)
In the attached videos, it explains clearing how this hyperinflation can and will happen, and using the Zimbabwe case as an example. It also provides some suggestion as a solution for individual in how to deal with it... Must Watch...
By the way, the rich tourist here can be your government too. :-)
Why not take a minute to google and find out how much "Money Supply" is produce by your rich tourist last quarter?
KH Tang
"Inflation is always and everywhere a monetary phenomenon.
To control inflation, you need to control
the money supply."
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