Obama and Bernanke Monetize the Debt

This is national suicide!

Might I point out that just six months ago, Bernanke flat out-and-out lied to Congress when he said, “We’re not going to monetize the debt.”

Of course, the stock market is reacting wildly, this morning, as investors dump their now worthless stock:

Monetizing the debt
By Bill Turner  – CFP

This is a day that will forever live in infamy.  [Yesterday] is the day that B. Hussein Obama came out of the closet and began to monetize the debt in earnest.
Monetizing the debt is an economic term for shell game.  It isn’t like a ponzi scheme, that would be Social Security, it is different and more dangerous.  When a consumer monetizes their debt, they pay off the balance of one credit card with another card and use the lower balance card to cover other debt, until the card is maxed out.  But, it doesn’t end there.  They begin to create more money through the use of payday loans, and every payday they fall further behind, until they can no longer borrow or pay on their debt.  This is when families file bankruptcy.  But, the federal government does this a little differently, because they have something most of us do not have, a printing press.

Our government is selling debt to the Federal Reserve, for cash, to cover things like paying for the massive spending they have undertaken.  This is being done because other lenders, such as China, do not want to loan us any more money, we are a bad risk.  This is where the government differs from the typical American household, the government has the Federal Reserve print more money.  Problem solved right?  Wrong!  The more there is of something, the less it is worth.  Having more money in circulation, because the government uses the freshly printed money to pay wages, salaries, operating expenses and such causes the money to lose value.  Since our money is not backed by anything but the full faith of the American government (that should allow you to sleep better at night) and we are buying our own debt with our own money, while printing more money, we have successfully monetized the debt.  So, rather than bankruptcy, you have ruination first.

Deficit spending combined with debt monetization leads to inflation.  But, not just normal inflation, the kind of inflation that means that you are not buying a loaf of bread, you are investing in it, as tomorrow it will be more expensive.  Aside from needing a wheelbarrow full of money to buy groceries, or being able to take a dollar out of your wallet and make it a ten with your pen, because it is just paper, there is nothing to worry about.  Unless, by “nothing to worry about” you mean nothing but:

Black Markets: Where a barter system, or inflated prices of goods and services are available.

Fluctuations: Fluctuations in both supply and pricing occur, almost daily, and are at the whim of the elite, the ruling class.  If the ruling class wants milk, they buy it and you are left to “eat cake”.

Corruption: Those with the money and access have the ability to bribe entities to get what they want, leaving the people to be further disenfranchised.

The rapid and uncontrolled price increases and devaluation of the dollar will not last forever.

To halt the loss of value in the dollar, the hyperinflation, corruption and black markets that spring up the government has no choice but to pull back money.  In pulling back money hyperinflation becomes deflation, the sudden decrease in goods and services causes the dollar to become worth more.  So, businesses and service providers are left with no profit, or have to sell their product at a loss, to avoid spoilage, further harming the economy, as they let people go.  Deflation leads to things like the Great Depression and more inflation as the government tries again to spend itself out of this situation.  Wicked monetary spirals become the norm and eventually class warfare through economic policy prevails and the road to serfdom is complete.

America, the ball is in your court.  Will you go the way of other countries that have monetized the debt?  Will you stop being politically correct, polite, and afraid of your government?  Will you stop preaching to the choir, stop complaining to those who “get it” and start doing something about it?  Will you take to the streets and demand to be heard, demand to be seen by the state run media, and educate your fellow Americans via constant protests, until victory is achieved?  Or, will you go quietly into economic upheaval and chaos, becoming slaves to the state?  The choice is yours and you are making it for generations to come.  What will you choose?

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11 Comments on “Obama and Bernanke Monetize the Debt”

  1. Irene Says:

    Thank you for this excellent, educational, and interesting piece that is best for those of us that don’t fully understand certain issues yet. I had heard the term “monetize the debt”, but I had not the opportunity or the remembering to learn about it until now. I will share this as it is wonderfully easy to understand and important.
    The grassroots won at our primary yesterday in Colorado. And we’ve been making headway with Clear the Bench Colorado. I pray for our country and that so many more continue to “wake up” and learn important matters such as monetizing the debt.

    • Thank you for your kind comments.

      You might also be interested in checking out what happened to the Weimar Republic when they started printing money to pay for their monetized debt. Here’s a quick graph:


      P.S. – Glad to hear that the grassroots won at your primary. Keep up the good work!

  2. senor doeboy Says:

    Grain, heritage seeds and bullets are the only things of worth in the end economic enviroment of this type. You think your gold is worth something? Try eating it while you’re starving. I hope you were smart and started hording when King George Bush II came into power and the Demonrats took control of congress. Welcome to the dark ages, brought to you by the Power Elite that have dreamed of their “Golden Age”, the age of serfdom and fiefdoms. Don’t worry the Minions of Muhammedan will also make sure that the second dark age won’t be so dark. Look for the wonderfully bright nuclear glow over a couple of U.S. cities as they reassert the war they started in 600 A.D.

  3. John Sobieski Says:

    You can almost smell it in the air – an imminent economic collaps, more govt intervention – just more deferment of reality. You can’t stop it – that ugly day – from happening. We are too far gone. Rough time ahead. Fasten your seatbelts.

    • irene Says:

      I stand corrected. While we still must do our part to prepare and protect, a few months ago I also could see the economic collapse coming. Thank God we have God.
      Familiar with the Tytler Cycle? We’re somewhere between dependency and bondage, I think. God help us all and I know His is.

  4. Irene Says:

    We are not too far gone. The grassroots won in CO yesterday. We are growing and getting stronger. We had more new people show up at our 912 meeting tonight. Do not give up. That solves nothing. Get involved, educated, and then educate others. That’s how we won and that’s how we’ll win in November. Nothing is won if you give up.
    Prepare, yes! Absolutely!
    And work for the best.

  5. adam Says:

    The govt. is betting on the fact that they can monetize the debt, because the USD is the world’s currency and every major country has bought our debt. One estimate I’ve seen is that there is about 200 trillion USD worth of debt and monetary instruments held by the US and foreign nations. If the dollar collapses it will take down a lot of currencies with it.

    • Nexus Says:

      The US is going to collapse like other empires across history – the historical parallels with the decline of Habsburg Spain, the British Empire, Roman empire, etc, are illustrative.

      Debt may not currently be a direct threat but it is surely a major indicator of a profound malaise. The patient is too far gone and fundamental crisis will emerge.

      A slow motion collapse in the dollar is inevitable as there is a profound weakness, there are also moves to establish alternatives (alternate currency, trading directly without using the dollar etc) and countries like China and Japan are now selling dollar holdings but are careful not to precipitate a panic as they switch sales of their products from the US to newly emerging and their own internal markets – this will take time.

      However, an unmanaged dollar collapse perhaps precipitated by an explicit Monetization strategy could create global economic dislocation as investors are inclined to turn to other safe havens such as gold, other currencies or other commodities. Demand for US Treasuries will then plummet which will then drive up interest rates. Import prices into the US will rise causing inflation and contribute to pressure to further increase interest rates.

      U.S. exports will be cheaper but US manufacturing is probably too weakened to respond and is now non-existent across many sectors – electrical goods, retail products, apparel, vehicle manufacture, etc.

      The impact of inflation and raised interest rates will further depress any opportunities to export and unemployment will deepen and the US will be in a profound depression.

  6. raweurope Says:

    Can there be any doubt that this modern-day fractional reserves banking system (debt = money supply)with its self-created casino-style leveraging games, AKA the derivatives market (where the physical casino is the NYSE), is going to collapse. Just the sheer numbers involved (at first it was multi-billion dollar bailouts and deficits, now we hear about multi-trillion dollar evaporation of wealth – all virtual currency, mind you, none of it real) go to show that the situation is out of control! If this is a game of poker and world citizens are sitting at the table with financial institutions, multinational corporations and other cartels, we the people need to go “all in”, call these suckers and make them show us their bluff. But we’re always folding before we can get a look (too big to fail) and each time we get screwed!
    If tomorrow everybody knew the truth about our banking system, the Federal Reserve and the fiat currency (US dollar, essentially monopoly money) backed up by absolutely nothing at all but people’s belief in this game – a con game in very fact! Wake up people! There is no real economy anymore. There is no real money or real investment worthy of that name, not when money can be printed out of thin air or, as is done nowadays simply keyed into a an account (more ecologically-friendly don;t you think?), and presto, the debt and deficit shortcomings are gone. Wow, just like that.
    Well, no not really because we as Americans may believe in this little game but the Chinese and Japanese and Europeans are not amused by it and are not going to be conned by it much longer. Of course, when the US currency collapses many other of the world’s currencies will follow in a domino effect, simply because everyone is invested in the dollar and that it has been THE worldwide reserve currency for over a half-century. So, as the world’s first superpower goes, so goes the world. Moral of the story: don’t give up your virginity (sovereign currency) so easily when you haven’t vetted your new bedmate to see if they have VD (toxic debt) or not. The only nations that will come out of the upcoming financial doomsday – and it’s not a question of if anymore, but when – will be the poorest ones because they have nothing to lose that they haven’t already lost.

    • Jan Czekajewski Says:

      Very Good!
      I can not find any else to ad.
      We need bright honest people in the Goverment to help, but they are in short supply. Yes we have NOMECLATURA (mediocre elite) but they do not fully understand what they did and therefore can not help. They will be washed out with many of us in the next financial ( or WW3) Armageddon

  7. […] Obama and Bernanke Monetize the Debt « Doctor Bulldog & RoninAug 11, 2010 … Might I point out that just six months ago, Bernanke flat out-and-out lied to Congress when he said, “We’re not going to monetize the debt.” … […]

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