“There is no question this will result in inflation. The amount of money we’ve borrowed, the amount of money we’ve printed has put us in a more dangerous situation than we’ve ever been in as a country. We may not see the inflation as long as the economy is slow. But, I’ve talked to some economic experts and once the economy starts picking up with so much money in the money supply and so much debt, we’re likely to see very high interest rates and very high inflation rates.”—Senator Jim DeMint (R-SC), ALG exclusive interview, December 10th, 2008.
When the governor of Zimbabwe’s central bank is praising your country’s approach to monetary policy, you know there’s a storm on the horizon.
Back in April, after opening up the Fed’s discount window to investment firms, Dr. G. Gono of the Reserve Bank of Zimbabwe (RBZ) hailed the U.S. and UK efforts to inject hundreds billions of dollars of liquidity into an ailing financial system. In his own words:
“As Monetary Authorities, we commend those of our peers, the world over, who have now seen the light on the need for the adoption of flexible and practical interventions and support to key sectors of the economy when faced with unusual circumstances.”
That was before the Foreclosure “Prevention” Act passed. Before Fannie and Freddie were practically nationalized. Before Indy Mac failed. Before AIG was given billions in loans to stay afloat. Before the Troubled Asset Relief Program.
Before the dark times.
In essence, before the largest bailouts had even begun, and before all fiscal discipline had given way to complete abandon, the head of the central bank that has produced over 200 million percent inflation was already seeing a lot in common between his catastrophic policies and those being pursued by the U.S. Indeed, Dr. Gono dubbed it “precisely the path that we began over 4 years ago in pursuit of our own national interest…” Some $7.7 trillion later in pledged bailouts, it is plain to see that this path is wrought with great peril.
And that’s what’s known as just the beginning. If you thought 2008 was bad, just wait until the next administration comes into town.
Enter OurFuture.org with its $1 trillion 2-year economic “stimulus” plan. The coalition, composed of more than 127 economists, 27 Big Union bosses, and 59 special interest groups, is already boasting that House Speaker Nancy Pelosi backs the plan and that they expect it to be on President-elect Obama’s desk in time for his inauguration, according to top sources.
According to OurFuture.org, the 2 Year Plan would include:
• $100 billion in “green” investments;
• $225 billion in infrastructure projects;
• $125 billion in aid to apparently balance state budgets;
• $80 billion for education;
• $15 billion for research and development;
• $70 billion for health care;
• $30 billion for unemployment insurance and COBRA subsidies;
• $30 billion for food stamps;
• $80 billion in poverty “reduction”; and
• $145 billion for a so-called “middle-class tax cut”.
And believe it or not, it gets worse. According to the coalition, the $1 trillion bailout “should define the floor, not the ceiling of what needs to be done.” Assuming the incoming administration shares in this thinking, then the Zimbabwean storm of inflation could soon be on the horizon.
Eventually, as Mr. DeMint notes, the economy will begin to recover. And even if it that rebound is very slight, when it occurs, the cataclysm of unbridled inflation may be merciless.
Robert Romano is the Editor of ALG News Bureau.
