Monday, June 02, 2008

The Big Squeeze

Nope, I'm not talking about a hug.

I'm talking about the rising cost of just about freaking everything in the United States.

We are feeling it here at Casa Gina. Big time.

A few months ago I told Hubba-huuba, just think! Soon we won't be paying for Mr. P's schooling any more! That was supposed to free up a nice chunk of money, but it seems that it will help us break even more than get us ahead.

Our dollar is worth less and less. Money you have in the bank is worth less than it was three years ago.

I just found out today (although it hasn't been a secret or anything) that Bernanke, the Fed chaiman, has chosen since his tenure began to suppress a previously published set of important numbers, known as M3. This report basically tells us how much money the government is printing.

And listen, there is a really good reason he didn't want people knowing those numbers.

Because then everyone would know that instead of the annoying but doable five percent inflation that has been reported, it is more like fifteen percent. The government is printing money like crazy to cover our debts. Well, their debts, as well as those of banks and the like, but we all wind up paying for them in various ways.

The falling dollar is another sign of all that money flooding the markets, and it won't be getting better any time soon. The next president will have no choice but to raise taxes, and so we will get squeezed on that side as well.

I hate to be Miss Doomsday 2008, but we should be afraid.

Very afraid.


Anonymous said...

I don't think they have published the M3 since 2006 or so. And they still publish the M2, which gives almost the same data as the M3 did, minus CD's over $100,000 and Euro deposits (I think). And, the inflation rate is based on the consumer price index, not the M3...(and thus, my background in statistics is revealed...)

Not that I don't agree with you that the money crunch is there and worrisome. I actually find the food supply issues massively concerning.

Gina said...

Right, it hasn't been published since Bernanke assumed leadership of the Fed. His decision. Bernanke claimed that the info in the M3 was "dupclicative" but there are many who disagree.

And, as far as I can figure, the M3 shows how much money the government is printing, which has a huge impact on inflation.

The CPI is only one part of the puzzle.

Gina said...

Oh, and unfortunately, CPI does NOT include things like food and gas.

You know, things that nobody ever buys.

Family Adventure said...

See, I had absolutely no idea about any of this...but what you are writing sounds frightening. For you as Americans, and for the rest of the world.


Atasha said...

I am very afraid.

J at said...

Hey, I thought I was the only one printing money to cover my bills! The feds are doing it too? Copycats.