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The Road to Hyper-Inflation

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posted on Mar, 16 2008 @ 12:55 PM
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The Road to Hyper-Inflation


www.todaysfinancialnews.com

Paper dollars are technically Federal Reserve Notes, which means they are liabilities of the Fed. When it puts newly minted notes into circulation it does so by buying assets, usually U.S. treasuries, which it then holds on its balance sheet to offset that liability. By swapping treasuries for mortgages, the Fed effectively alters the compilation of its balance sheet and the backing of its notes.

However, backing paper money with mortgages is nothing new. The French tried it in the late 18th Century, and it lead to hyperinflation. Assignats, which were first issued in 1790 to help finance the French revolution, were backed by mortgages on confiscated church properties.

Although the stolen underlying collateral did have some value, the revolutionaries saw no reason to limit how many Assignats were printed, which resulted in massive depreciation. Within three years, price controls were introduced and failure to accept Assignats, initially an offence subject to six years in prison, was made a capital crime. By 1799 the currency was completely worthless.

(visit the link for the full news article)



[edit on 16-3-2008 by DimensionalDetective]




posted on Mar, 16 2008 @ 12:55 PM
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So what exactly is the fed up to? Are they actually BUYING the mortgage debts with their worthless hollow dollars? It sounds like a repeat of the what the french did, only perhaps they will now OWN all the housing? I wonder if that is the goal? To just let the dollar die off completely, and in the process use it's last little strength to buy up the housing markets and commodities that people need-then perhaps switch to a DIFFERENT currency all together, so they can then control the sales of all these necessities?

Chime in here folks.

www.todaysfinancialnews.com
(visit the link for the full news article)


[edit on 16-3-2008 by DimensionalDetective]



posted on Mar, 16 2008 @ 01:39 PM
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For real, or an illusion,how can a normal citizen differentiate,the big boys are they messing with us??or will certain elements rise up. aw rats maybe.



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