Money Supply And The Fed

Cheap money from the Fed...

The Fed this last week announced that, in the latest short term loan giveaway, it had provided yet another $75 billion in loans to the banks. In total, since December, the Fed has handed over close to half a trillion dollars to the banks, with no end in sight. In the latest auction, the rate charged to the banks was 2.22%.

That cheap money the Fed is loaning, at very cheap rates, was just created out of thin air. Here's the even scarier part...Every time they create another $50 or $75 billion it adds to the money supply already in circulation making every dollar you hold worth less.

And its not just a little less, since June of 2007 the Fed has been increasing the money supply by over 16 percent. What this does is translate into much higher prices at the gas pump and food...that's were most of the increase has shown up so far.

Matter of fact, I went shopping with the little lady yesterday and noticed prices up on a few things that I buy....Increases of 25 and 30 percent in the last year alone on many sundry items. And where the price hasn't increased they repackaged the merchandise and made it smaller.

The government is telling us inflation last year was up between 3 and 4 percent. While our inside sources are showing 11 percent increases to be correct. Of course they do the numbers the old fashion way...the way the gov did it before we went off the gold standard in 1971.

So why is all this important....well remember that 16% increase in the money supply, that's going to bake inflation into the cake for several years to come. That fact alone translates into higher prices year after year, not only at the gas pump, but also for everything you buy.

Now for the good news. You can protect you and your family against the fast rising prices now and into the future by simply buying silver and gold coins. Silver under $20 an once is a buy, under $17 is a bargain and under $15 a steal. These prices will not continue and if you want to protect yourself find out where your local coin dealers are located. Then go visit them, talk with them and start buying from the ones that you feel good doing business with. Buy a little at time exchanging paper money for gold and silver, real money that will appreciate in value while those paper dollars become more and more worthless.

Protect yourself from an ever increasing money supply and The Fed buy silver and gold coins and bullion...start today and keep doing it, you'll be glad you did.

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