Image via WikipediaThe government is overdosing the economy with cash. Five trillion dollars so far. This may be good news to Wall Street, but it is a massive problem for Main Street America.
Wall Street loves money. They are used to huge amounts, but as good as it makes Wall Street feel. It is a massive problem for you and I. Why?
When 5 trillion dollars hits the economy it will be like a massive overdose of heroine and the economy will be DOA. The problem is that the more money the Fed infuses into the economy, the more likely it is that massive inflation will result. Interest rates and prices could sky rocket by 100% resulting in less buying power. In an economy that depends on people buying, this would be a massive problem of unprecedented levels.
Imagine that a new 19 inch tv could cost 2000 dollars and the grocery bill is a thousand a week, but your making half as much in real consumption ability. Now you are making money but it's worthless. You need a wheel barrow to buy a candy bar.
This is what happens when there is way too much money in circulation. At the moment we are almost there. Banks will have finished blackmailing the U.S. Government and start lending. The money will hit the economy and things will be good for a year maybe two, but then there will be too much money in the economy and the price of things will start to spike. When they do go up it will be a run away train and the government will be forced to take money out of circulation by the trillions. When this happens expect an even more staggering economic crisis than any economist can ever imagine. Not only will the bottom fall out but the handle will come off. People won't be unemployed. They will be asking what a job is, because there won't be any in this country.
The bottomline is that you can all dillude yourselves that Obama has a magic wand, but reality is going to come to roost real fast.