Voodoo Economics

(Fortune Magazine) -- Just how red-hot is the current worldwide expansion? "This is far and away the strongest global economy I've seen in my business lifetime," U.S. Treasury Secretary Hank Paulson declared on a recent visit to Fortune's offices.

Notice how he is referring to "worldwide" and "global"?

I see two things happening here.

-1) The U.S. stock market is now heavily invested in foreign ventures and wildly successful corporations in places like the Asian rim, where business is booming. Good for stockholders.

-2)The U.S. dollar is in free fall towards complete collapse. It takes more and more dollars every day to buy the same things, including stocks. Bad for us.

Most Americans - uneducated in economics - constantly complain about rising prices. They seem to have a layman's grasp on the concept of supply and demand, but they have no grasp on the disastrous effects of creating money.

Whether the Federal Reserve notes in use now are "real" money is not the issue here. They are the units of exchange we accept today, so I refer to them as "real money", real or not.

Whenever you charge anything - food, clothes, jewelry, theatre tickets - you are actually creating money, the exact amount -dollar for dollar - you charge. The numbers of dollars you charged go into our system and are treated exactly like real money, and thus become real money.

Think not? The credits you created by your purchase are used by the company that accepted them to do whatever they wish: Pay employees, buy more product, put in the bank as savings. Sounds like real, usable cash, right? It is.

This increase in the money supply puts pressure on the dollars already in circulation, reducing their ability to purchase any given product. Enough increased pressure results in a "Price increase", which really means it is now taking more less valuable dollars to purchase a product.

Every time Bush and Congress authorize more deficit spending, the result is the same. They purchase "product" with non-existent money, creating "credits" that are treated just like money, enter the system, and become money.

We all have charge cards, use them often, and so are just as guilty as any other simpleton who wants his rewards up front.

If you have a debit card, the results are different. A debit card immediately transfers funds from your account to wherever you used the debit card. No additional "credits" are introduced into the system.

There are those who claim to use their credit cards but pay them off each and every month, thereby avoiding finance charges. Idiots all. Every dollar they charge adds additional pressure to the system, reducing the purchase power of their dollars - and ours.

The stock market is booming, but it no longer accurately reflects the health of the American economy, it's just like U.S. Treasury Secretary Hank Paulson said above, it's reflecting "worldwide" and "global" conditions, something that NAFTA, GAT, and the covey of treaties have created... at the cost of every American alive today, and for generations to come.

Gasoline is hovering around three dollars a gallon. Many food products have gone up almost twenty percent. This I know, I closely watch the cost of food. Other products have been steadily increasing in cost. Yet the feds tell us inflation in under control.

Nonsense.

We are about to bite the bullet, thanks primarily to the efforts of Bush and Clinton. What's unbelievable about all this is the Hillary is a front runner for our next president.

Insane.