Inflation

The stock market has done very well recently, even hitting new highs. There are two ways to look at this increase: 1) The Obama administration has finally got some proof in it's statements that the economy is improving. 2) Inflation is coming to the stock market. In response to 1), nearly all other indicators about the economy are dismal. In response to 2), the recent Fed. moves, QE 3, is a step to more inflation.

QE (Quantitative Easing) means that the administrative is printing more money. It should not be any surprise that this administration is spending more money than it takes in and that the deficit is growing larger each year. The deficit is covered by more borrowing and printing of money. Right now the deficit is in excess of 16 trillion dollars. About three years ago Ben Bernanke, Chairman of the Federal Reserve System, was asked about monetizing the debt. He answered that he would not do so. Shortly after, he did indeed monetize the debt and we had QE 1. Monetizing the debt (which makes the dollar worth less) in spite of what he had promised. Later we had QE 2 because, as stated at the time, the banks needed more money to lend to those that needed it, the economy was not recovering as anticipated. Now we have QE 3 because, one more time, the banks need more money to stimulate the economy. Each time there is quantitative easing our dollar is worth less. When the dollar is worth less it takes more money to buy goods. That is what we are seeing in the stock market, it takes more money to buy stocks now.

Of course, the stock market is not the only place where it takes more money to buy goods. The gas station is an example that touched me recently. I filled my tank with just over 15 gallons and the bill came to $55. 94. The super market is another place, a can of Campbells soup used to cost .96 and now costs $1.25. The Blizzard from Dairy Queen was $1.00 and now sells for $2.49. Inflation is here and the problems that come with it are only going to get worse.

Obama is to be admired for his persistence in continuing what he believes to be true, big government and Socialism is the direction for this Country. In spite of an economy in decline, he continues in his ideology and will not accept capitalism as a possible answer. The buzzing fly in the window is also to be admired for it's persistence in trying to get free, continually banging it's head against the window. As we all know that type of persistence leads to death.