The PIIGS (Portugal, Italy, Ireland, and Spain) and the United states pursue somewhat similar economic courses. Both regions have decided to build massive governments, huge entitlement programs, amazing government employee benefit and retirement programs, and spend themselves into unbelievable deficits. Of course, the United States adds to this empire building, ??????nation building??????, world cop duties, and continuous war in support of U.N. resolutions around the world.
The courses described above lead to the bankruptcy of currencies.
In the case of European countries the currency that is suffering a massive loss of purchasing power is the Euro. This will continue as the bailouts continue. Europe is wed to its socialist ideals even though it watched Russian Socialism fail and as it experienced the massive and deadly destruction caused by National Socialism in WWII. They ignore those examples (as well as the examples of China and Cambodia and Vietnam who destroyed their societies by pursuing socialism which lead to Communism) and say, ??????This time it will be different.?????? (America has abandoned its form of government, a Constitutionally limited Republic, and become a Socialist or Social Democracy; For information on the real political spectrum see: http://www.youtube.com/watch?v=N4r0VUybeXY )
Since Woodrow Wilson the United States has gradually pursued a similar course of ever more and more socialism that many misguided European nations have followed. First, it adopted minimum wage laws (forcing lower paying jobs over seas???????and the high paying management jobs that went with them). Then it adopted FDR????????s Social InSecurity Ponzi scheme. Next it swallowed LBJ????????s socialist health care programs of MediCare and Medicaid which lead to Bush????????s disastrous trillion dollar Part D expansion that added a drug program to Medicare and finally the coup de gr????ce, Obama????????s ObamaCare, the ultimate socialist economy and currency destroyer. There are many additional “redistribution of wealth” and socialist programs I won’t enumerate here that are also leading to currency destruction. Most of these programs not are properly funded; nor can they be. When every thing is free the demand is near infinite.
Recently, while cruising the western Caribbean on the cruise ship, Mariner of the Sea, I observed the hundreds of overweight people on board (myself included) going back for plate after plate of food. They kept going back even after they were no longer hungry. So did I. The food was paid for and there was no limit to what a person could eat. It????????s human nature to want more and more and more. Gluttony, lust, covetousness, and envy are all too common.
At least half of the American people, like the Europeans, now believe they are entitled to an endless cornucopia of free goods and services magically paid for by the ??????rich.?????? With itching ears they gather lies unto themselves badly wanting to believe in the siren song of ??????something for nothing.?????? Little do they know that if we take all the wealth of the rich and divide that wealth equally among the poor, every one will then be poor. The only way for everyone to get rich is for everyone to practice the good habits of the rich (admittedly some of the rich are not deservedly rich and not all their habits are good habits). The pie doesn????????t get bigger just because we divide it between more people. The pie only gets bigger if we make more pie. That requires everyone working more, working smarter, and working harder.
This very brief discussion of the problems of socialism reminds me of a cartoon I saw on the Internet recently. Obama, with a crown on his head, stands on a balcony promising the massed people in the streets below free health care, free food, free education, free housing, etc. Then he promises all the jobs anyone can want. Someone in the back asks: ??????What do we need jobs for??????? That????????s one of the main problems with Socialism, people begin to believe they don????????t need to work for a living and those who do work begin to believe it does no good to work as they can????????t keep the fruits of their own labor. Those fruits are siphoned off for the parasite class to absorb. The fiat money printing press presents the illusion of wealth. Wealth cannot just be printed; it must be produced through hard work and the proper application of real capital. Inflation steals the value of existing currency from all currency holders, rich and poor, foreign and domestic.
Until now this entire U.S. Socialist largess has been paid for by taxpayers, by borrowing on an unprecedented scale, and by loans from the Federal Reserve (money produced from nowhere and lent to the U.S. government as the Federal Reserve buys the Treasury????????s debt instruments). As China and others begin to back away from Long Term U.S. Treasury Debt the U.S. government must increasingly turn to the Federal Reserve to buy its bonds. The bond market and the dollar are becoming the biggest bubble of all time. The Federal Reserve isn????????t just printing Federal Reserve notes to bail out the U.S. government, it????????s also sending trillions of dollars to European banks and to U.S. banks deemed to big to fail to bail them out.
All of this printing of money dilutes the value of the currency. It????????s called ??????monetary inflation?????? or ??????Currency Inflation??????. It causes ??????Price Inflation?????? or increasing prices. The nations of the world have seen this same currency destruction played out many times, but the people forget, or they simply don????????t understand what????????s going on. Then the con men can step in and rob the people through inflation again. It????????s a con that works for the con men almost every time. The ??????redistribution of wealth?????? crowd uses this con again and again. It always ends in disaster.
Of course, this is why the framers of the Constitution wanted Americans to use silver and gold for money. You can????????t just crank up the printing press and print trillions more when the money has to be mined. Silver and gold preserve wealth. Fiat money (paper money not backed by hard assets) ultimately always confiscates wealth. The sheeple are ignorant of the history of fiat money. That????????s why the con men can play the game over and over again across history????????s timeline.
In Europe about 6% of the population understands what inflation is. That 6% buys precious metals. In China and India the percentage that invests in silver and gold is much larger. Only about 3% of the U.S. population understands what inflation really is and where it comes from. Those people are quietly buying silver and gold. They know that Silver Will Soar When the Dollar and the Euro Fail.
(for more on this topic see my other articles: Silver Will Soar When Dollars Come Home: https://area-info.net/articles/show.php?cty=Logan&st=Utah&article_id=762 and Silver Will Soar When the Dollar is Repudiated: https://area-info.net/articles/show.php?cty=Salt%20Lake%20City&st=Utah&article_id=807 and ??????Silver is Real Money??????: https://area-info.net/articles/show.php?cty=Providence&st=Utah&article_id=734 and finally, read this short article: ??????Silver vs. Paper discussion in Coeur d???????? Alene??????: https://area-info.net/articles/show.php?cty=Coeur%20D%20Alene&st=Idaho&article_id=783 )
Investing in stocks and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.