Your Questions About Investing In Foreign Coins

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John asks…

Shouldn’t we abolish the FEDERAL RESERVE and go back to the GOLD STANDARD?

A speech given to congress by congressman Ron Paul, MD:

Mr. Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. I also ask unanimous consent to insert the attached article by Lew Rockwell, president of the Ludwig Von Mises Institute, which explains the benefits of abolishing the Fed and restoring the gold standard, into the record.

Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble last year, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.

With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government.

Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.

In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans’ standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.
i guess you are one of those people who never reads books or anything that takes longer than a few seconds to read.

Justin answers:

The issues of the abolishment of the Federal Reserve and return to the Gold Standard are two separate issues. Remember the Federal Reserve and the Gold Standard co-existed for decades before the U.S abandon the Gold standard.

*** Should we abolish the Federal Reserve?

To be replaced by what?

If you saying “Nothing”, then my answer would be: No.

What you are advocating there be no central bank authority. We can look at history for what it would be like without a central bank authority.

-There would be no national coordinated monetary policy. Each bank would expand or contract credit based on their immediate business needs, not the natons requirements.

– Smaller banks would be dependent on larger banks for credit extensions, currency, etc. History has shown that larger banks often consider smaller banks as competition and didn’t care if they failed. (After 1935, the Fed was charged with looking after the overall health of the system)

– Federal Reserve notes would have to be replaced by…? Prior to 1913, there were 30,000 forms of currency being circulated. (Though states could not coin money, state banks could issue currency).

– The Federal Government would have to do it’s banking in large private banks

– In international monetary matters, the nations largest private banks would represent America

– There would be no elasticity to the currency. You would see more cycles of inflation/deflation, and boom/bust as we saw in the 1800s

– Banks would return to being audited soley by themselves in their shareholders interest. (After 1935, the Fed was charged with being the nations bank auditors to serve depositers interest as well.)

– Clearing of checks would go back to private clearinghouses often run by large banks. Without an impartial clearinghouse, decisions in the process would sway toward the private interests that control it.

Or, are you saying replace it with something else rather than return to the old days? If so, what would that be?

In reading Mr. Paul’s speech, it appears his complaint is not with many of the central banks operational functions but with monetary policy.

*** Should we return to the Gold Standard?

No, not if we can avoid it.

Virtually every industrialized nation was once on the gold standard at one time and abandon it as impractical. Going back to the Gold Standard seems so alluring but it is worthy of studying the history on it before proclaiming an opinion.

The #1 reason is that when you do foreign trade, other nations will want the payment in gold rather than notes. Most countries, including the U.S. Abandon the gold standard as they saw reserves dwindling.

The #2 reason is the inelasticity of a gold standard. You can’t introduce new currency when the nation needs it. During the Great Depression, the country needed more cash. But because it was locked to the gold standard, no new currency could be created. Roosevelt tried to deal with it by making private gold ownership illegal to increase the reserves, and to devalue the dollar (i.e. Less gold was used to back each dollar).

A famous black mark on the Federal Reserve was when they raised the discount rate in the height of the great depression. Yes, it was stupid but legally their hands were tied. Gold was flowing out of the country and the amount of currency they issued could not exceed the quantity that gold was backed.

A gold standard does address the persistent inflation issue. Instead it creates cycles of boom/bust with inflation/delation with the average inflation falling around 0%.

Current economic thinking is that a little inflation is a good thing. It acts like a tax on idle money and incentifies people to invest their money, therefore providing economic stimulous.

Deflation is bad because it encourages people to sit on their money.

Too much inflation is bad because people opt to exchange money for stable assets rather than invest.

George asks…

What are the advantages and disadvantages to…?

Nuclear power?

10 pts for best

Justin answers:

Advantages are no greenhouse gases and 0 emissions. Disadvantages are no place to safely store all the spent fuel rods.
Here is my term paper on the subject. I hope it helps
Joseph McCudden
June 2, 2008
IDS 125: Environmental Collapse
Term Paper

Benefits of Nuclear Power Plants

The United States of America needs to start building nuclear power plants to lessen our dependence on foreign oil. “Without nuclear power the United States will have difficulty in … providing electricity to manufacturing industries,” (American ceramic society bulletin p 20). The United States has not built a new nuclear power plant in nearly three decades. In the United States nuclear power only accounts for approximately twenty percent of our total power production but varies state to state. Currently thirty one states have nuclear reactors and Illinois leads the United States by producing 11,379 Mega Watts (MW). In order for the United States to keep up with their energy demands we need to invest in nuclear power. By creating these power plants we can reduce our dependence on foreign oil which could also help lower the rising gas prices.
Nuclear power has always been a viable solution to our energy needs but because of two famous nuclear accidents the public has shunned this technology. The first being the Chernobyl incident where reactor four exploded due to a stream buildup releasing large amounts of radiation over hundreds of kilometers. The second famous nuclear accident happened in the United States at Three Mile Island where there was a partial melt down and a small amount of radioactive gas was released in to the air. The amount of radiation released was less than a person is exposed to on average from cosmic rays. The reactors that the untied states have built have far more security and redundant safety systems to prevent any Chernobyl-like accident. Although Three Mile Island and Chernobyl are not the single cause for the stop of new nuclear power plants they did not help the cause. “Construction delays, cost overruns, high interest rates, systemic safety issues, a whole lot of no-nuke protesters, and a surprising dropoff (sp) in electricity demand, all of which predate 1979. Three Mile Island didn’t kill the nuclear dream. It was just another nail in the coffin” (Whitford, David).
Since Three Mile Island every American nuclear power plant now has a minimum of two inspectors from the Nuclear Regulatory Commission at all times. Inside the control room they have a no dangling rule. This means nothing can be hanging off your shirt and nothing on your head that could fall off and hit a button that is better left untouched. On December 2, 1942 Enrico Fermi is said to have coined the acronym SCRAM. SCRAM stands for Safety Control Rod Ax Man. This was a very important job that a colleague of Fermi, Norman Hillberry. Hillberry stood next to the rope that raised and lowered the control rods, if needed Hillberry could cut the rope with and ax lowering the control rods and stop the reaction in seconds. The control room has a SCRAM button although the control rods are now lowered mechanically and there is no one with an ax to lower the rods. Every person who works in the control room spends a week in training and testing every few months in a custom simulator that is exactly the same as the control room they work in back at their plant. Spent fuel rods are currently stored on site in forty feet.
There are main types of nuclear reactors which are either thermal reactors or fast reactors. A thermal reactor is one where the neutrons that are created by fission before starting more fission reactions. Fission is the splitting of atoms in which large amounts of energy are released along with neutrons. This process can happen naturally or artificially by firing neutrons at atoms. Most of the thermal reactors use the isotope uranium-235 and the most common thermal reactor is the Light Water Reactors (LWRs). There are two types of LWRs, the boiling water reactor and the pressurized water reactor. The maximum operating temperature for water is about 300 degrees Celsius and operates at about 32% efficiency. There are two ways to increase the efficiency. They are either to raise the temperature of the water in the reactor or lower the temperature of the return water to something cooler than it is now. Although it is ideal to lower the cooling temperature it is easier to increase the temperature of the water in the reactor so alternatives to water are currently being researched.
The other type of nuclear reactor, the fast reactor, the neutrons are produced the same way as in a thermal reactor but the neutrons in the fast reactor are not slowed down before creating more fission reactions. These reactors have the versatility to use many different types of fuels besides uranium-235; they can also use transuranic metatarsals. Transuranic materials are elements that have a higher atomic number than uranium and all of them are created artificially.
Economically speaking new nuclear power plants would save billions of dollars a year on oil. One uranium fuel pellet, which is about the size of the end of your pinky, has the equivalent to 1780 pounds of coal, 149 gallons of oil, or 17,000 cubic feet of natural gas. Not only will the untied states save money on oil but the individual customers will save any where from .8 cents to 7.9 cents per kilowatt hour depending what one’s power plant is currently using for fuel. Currently we get most of our nuclear fuel from Russia but, there is an enriching plant in Eunice, New Mexico. This plant will hopefully bring economic stability to an area that is very unstable. That stability can only happen if the United States starts to build more nuclear power plants. Not only will new nuclear power plants help with our growing electricity and oil needs but also have benefits in making hydrogen for hydrogen powered cars, extracting oil from sand and shale, and purifying water. Nuclear power plants help nature out to because most humans do not want to be around one but animals do not care. Nuclear plants do not make a lot of noise, they do not poison the air with smoke like coal burning plants, and they do not kill birds like wind turbines occasionally do.
Nuclear power plants are looking to the future with two new designs that have never been used in the United States before. One design is by Westinghouse that is projected to produce 1.1 gigawatts power from two steam generators. The two steam generators are connected to a main reactor and have a number of safety systems that do not need electricity or cooling water to work. It also requires half the valves and about one sixth of the piping that a similar power plant with the same power output would have. This means that there are less moving parts so a less chance of a valve failing or having pipes corrode and burst. The other design is by General Electric and it is called the Economic Simplified Boiling Water Reactor. This is a big step forward because the recirculation pumps and safety system pumps have been replaced by gravity-driven water circulation and passive safety systems. These simple systems are said to cut construction and operation costs and reduce the chance for mechanical failure.
As great as nuclear power sounds it does also have its drawbacks. When thinking about solving some of the problems, one would look to France because of their extensive history with nuclear power. For most problems this works but currently France has the same problem as the United States as to where to dispose of the spent fuel rods safely. France tries to solve this problem by reprocessing the spent fuels rods. This process involves soaking the rods in acid to extract plutonium and enriched uranium. Unfortunately reprocessing releases massive amounts of radioactive gases and liquids which can harm the environment more than the spent fuel rods alone. Another problem is that during droughts reactors have to slow down or shut down because of the lack of water that is needed for cooling. In a 2003 heat wave, in France, shutdown seventeen reactors because the temperature of the river rose to high and endangered the aquatic life.
These reactors produce 549 billion kWh and France only consumes 482 billion kWh and exports 60-70 billion kWh each year.
Nuclear power is a great short term fix for our current global warming situation. Right now nuclear power is the best because it is cheaper and more efficient than using wind or solar power. Unfortunately with nuclear power comes the task of disposing of the spent fuel rods. Currently in the United States there is no central location to store these fuel rods, but they are trying to store it in Yucca Mountain in Nevada. No spent fuel rods have been put there yet because of safety concerns. This is the main concern about nuclear power and this is why it is only a short term fix. Money needs to invested in both wind and solar to make them more efficient. There are less environmental concerns with using solar or wind power because like nuclear power there are no greenhouse gases but unlike nuclear power wind and solar do not have a radioactive component. There are some environmental issues with solar and wind power but nothing in comparison to the potential hazards of radioactive material leaking out. Another reason that reactors are only a short term solution is because as temperatures rise and heat wave frequencies increase water availability will decrease making it harder and harder to cool the reactors and eventually price nuclear energy out of business. That is why nuclear power will be a short term fix while we improve solar and wind technologies to make those technologies more cost effective and efficient.
Nuclear power is a good solution to help reduce greenhouse gases which will help slow global warming. But, becau

Steven asks…

what are the major imports, exports of Bermuda?

Justin answers:

Main article: Economy of Bermuda
Bermuda’s currency is the Bermuda dollar, which is pegged to the US dollar. US notes and coins are used interchangeably with Bermudian notes and coins within the islands for most practical purposes, however banks levy a small exchange rate for the purchase of US dollars with Bermudian dollars.[2] Bermudian notes carry the image of HM Queen Elizabeth II. The Bermuda Monetary Authority is the issuing authority for all banknotes and coins, as well as being responsible for the regulation of financial institutions.

As the offshore domicile of many foreign companies, Bermuda has a highly-developed international business economy; it is a financial exporter in insurance and other financial services.

Bermuda’s per-capita income is approximately 50% higher than that of the United States; according to the Bermuda Government’s Economic Statistics Division, Bermuda’s GDP was $4.857 billion in 2005, or $76,403 per-capita, giving Bermuda the highest GDP per capita in the world.[3]

The average cost of a house in June 2003 had risen to $1,000,000, making Bermuda one of the most expensive (and exclusive) countries in the world in which to live.[[3]]

Bermuda is regarded as a premier offshore business jurisdiction, with low direct taxation on personal or corporate income. The local tax system is based upon import duties, payroll taxes and consumption taxes. The legal system prevailing is derived from that of Britain, with recourse to English courts of final appeal. This is regarded as advantageous by many international trading entities and banks.

Such are the numbers of leading international insurance companies based in Bermuda that the territory is one of the world’s largest reinsurance centres.[4] Those internationally owned and operated businesses that are physically based in Bermuda – of which there are around four hundred – are represented by the Association of Bermuda International Companies (ABIC). In total, over 1,500 exempted or international companies are currently registered with the Registrar of Companies in Bermuda.

Tourism is Bermuda’s second largest industry, with the island attracting over one-half million visitors annually, of whom more than 80% are from the United States. Other significant sources of visitors are Canada and the United Kingdom. Tourists arrive either by cruise ship or by air at Bermuda International Airport, the only airport on the island.[5]

Main article: Politics of Bermuda
Executive authority in Bermuda is invested in The Queen and is exercised on her behalf by the Governor. The governor is appointed by the Queen on the advice of the British Government. Defence and foreign affairs remain the responsibility of the United Kingdom, which also retains responsibility to ensure good government. It must approve any changes to the Constitution of Bermuda.

The Constitution of Bermuda came into force on June 1, 1967 and has been amended in 1989 and 2003. The head of government is the premier. A cabinet is nominated by the premier and appointed officially by the governor. The legislative branch consists of a bicameral parliament modelled on the Westminster system. The Senate is the upper house consisting of eleven members appointed by the governor on the advice of the premier and the leader of the opposition. The House of Assembly, or lower house, has thirty-six members elected by the eligible voting populace in secret ballot to represent geographically defined precincts. Elections must be held at no more than five-year intervals.

The current governor is Sir John Vereker, appointed on April 11, 2002. Following his victory over former Premier Alex Scott at the Progressive Labour Party delegates’ conference in October 2006, the current premier is Ewart Brown. The United Bermuda Party serves in opposition.

The Progressive Labour Party leadership supports independence from the United Kingdom, although polls continue to indicate that this is not supported by the population. A referendum in 1995 on independence was defeated by a substantial margin.

Mark asks…

How can I invest 10000$?

Justin answers:

You can invest it in many different things. Bonds, stocks, mutual funds, CD’s, T-bill, gold, silver, land, rare coins, art, antiques, baseball cards, to name just a few.

It would be perhaps better to ask, “How would you invest $10,000?” At least that way you would get different points of view.

If all I had was $10,000 to invest and I did not have any outstanding debts to be paid off, I would put $3000 in oil stocks, $3000 in a mutual fund investing in China, and $4000 in T-bills or a mutual fund investing in foreign debt because the dollar is not a healthy place to be right now.

Ken asks…

is buying foreign currency a good investment?

Several of my family members have shown some concern about the possible devaluation of the American dollar- because it isn’t backed with gold or other commodity. From my understanding, the US government prints additional money to make up for any shortfalls in their budget, furthur decreasing the value of cash money.
I have been told that to “even things out” that eventually the US dollar will need to be devalued- maybe up to 35% compared to other monetary instruments. This would make my $15,000 savings overnight lose over a 1/3 of it’s value.
Investing in foreign currency has been suggested- but my main concern is, isn’t other countries having similar issues? What would be a good investment? My brother says “buy nickles”- the value of those will increase, because of the material they are made of.
Any recommendations?

Justin answers:

Right now the FOREX, stock and bond markets are a mess. There is no rule of law, and a lot of countries/cities/states/counties are defaulting on their debts, making their bonds worthless.

Right now we’re at a very wild junction in history where 3 main currencies (the pound, the dollar and the euro) are all tanking at once due to overprinting (inflation), and there are no safe havens other than metals and trade goods. The last of the safe haven currencies just disappeared… The Swiss decided to debase their currency by pegging it to the euro.

The best thing is to preserve your assets now by purchasing gold and silver… The real thing… And take physical delivery. You don’t want to lose your money when the currency crashes. You pay your bills and keep as little in the bank as you can, then buy silver or gold bullion with what you have left to save. Store it yourself (they’re raiding safe deposit boxes at banks). After the currency crashes they will roll out a new currency… Then you can take your bullion down to the coin/bullion store and trade it for that new currency so you can go shopping.

Donald asks…

seeking a cheap property investment in Brazil?

any body have a experience or knowledge about this, share plz

Justin answers:

The fifth largest nation in the world, Brazil is a spectacularly diverse country, with over seven thousand kilometres of beautiful beaches and crystal-clear waters edging a nation where tropical rainforest sits side-by-side with huge, bustling cities. All of these aspects of Brazil individually contribute to its appeal with tourists, and the industry is growing rapidly.

With over 300 days of sunshine per year, a well-developed infrastructure, and the striking natural beauty of the Amazon, Brazil can provide an unparalleled destination for travel. However, to the canny investor, all of these factors contribute to making investing in Brazilian property just as appealing as visiting the country for a holiday.

The Brazilian economy is strong, with inflation very low, and the country having recently become self-sufficient in oil production. This is leading to the growth of wealth, particularly in the cities, and in turn to rising property prices and further economic growth. Last year property prices rose on average by over 15%, and this growth is being sustained by the economy, and by increased international interest.

Off Plan Property World gives its clients the opportunity to join this wave of international interest in Brazilian property. Whether you are a professional investor looking for a number of buy-to-let properties, or a private individual looking for a beautiful holiday home with long-term prospects for capital growth, the Brazilian properties offered by Off Plan Property World could provide you with exclusive, quality investment opportunities at preferential rates.
————————————————————————————Brazil at a glance
Population: 182 million
Language: Portuguese
Currency: Real
Capital: Brasilia
Political System: Parliamentary republic
Land area: 8,511,965 sq km
Climate: Tropical/temperate in the south
Time zone: GMT -3
International airports: Sao Paulo, Rio de Janeiro, Salvador, Brasilia, Natal and many other smaller local airports.
Flights from UK: Flight time ranges from 9-11 hours direct from the UK. British Airways, TAP airlines, Airtours, Varig and Tomsonfy fy direct to Brazil and it is possible to get indirect fights from most of the major carriers.

Why Brazil
Low Prices
Brazil and the Bahia region in particular ofers excellent prices in a beautiful idyllic setting – property can be anything up to half the price of Spain, and is cheaper than the Caribbean. Construction costs are much cheaper too.
Booming tourism
Foreign tourism is developing fast. Internet travel company Opodo has predicted that Brazil will be one of the top emerging destinations in 2007. From 2007 – 2014, tourism is set to grow at 4.3% per annum. (source WTTC).
Solid economic future
Te BRIC countries (Brazil, Russia, India and China) have all, in recent years, taken steps to reform their political and economic systems in order to compete in the world economy. Te term “BRIC” was originally coined in a 2003 paper by Goldman Sachs, which predicted that this group of countries has the potential to become economically stronger than the current richest countries in the world by 2050. Increasing wealth amongst the population will increase demand for property and push up prices.
No restrictions on Property ownership
Tere are no restrictions on foreign ownership as the government is keen to encourage inward foreign investment. All property in Brazil is freehold.
Local Mortgage Market expanding
Falling interest rates and increasingly accessible mortgages will push up property prices. According to Te Daily Telegraph (13/01/07), only 22% of the population have fnanced their property with a mortgage, compared to 70% in Europe and USA. As banks diversify and develop their mortgage products, the market will grow, and the knock-on efect will be increasing demand for property.
Government economic improvments
President Luiz Inacio Lula da Silva, popularly known as Lula, was elected for a second term in October 2006 with a strong agenda of economic reform and improvement. Under his government, interest rates have dropped to 15.75% from 26.5% in 2003. He is also working to bring down infation – it is currently at 5% after reaching a dizzying 2,500% in 1993. While these fgures may still seem high to us, the improvement within Brazil is enormous.
Getting in early
Brazil’s property market is in early stages of development which means there is lots of room for growth, balanced by the government’s stated policy of “high-priority sustainable development”. Additionally, with the pound strong, UK investors have increased buying power there.
The beautiful People
Anyone who has been to Brazil or who has encountered Brazilians will tell you how passionate, energetic and friendly they are – they embrace a love of life and love a party – their carnivals are renowned the world over! Tey are passionate about life, football, music and food – their heartfelt belief is that life is there to be enjoyed!
Low cost of living
Te cost of living in Brazil can be as little as 20% of that of the UK. Tis means that it is possible to enjoy high standards at relatively low cost.
Increased local buying power
Recent economic growth, the government’s fscal improvements and growing fnancial confdence have meant that Brazilians are becoming increasingly well-of. Tey have increased buying power and as mentioned, their mortgage market is set to expand and grow. Brazilians love their country and are waking up to the possibilities of investment property ownership. Tey are eager to invest in high quality developments for second homes and holiday homes. City-dwellers in particular aspire to owning somewhere they can escape the noise, trafc and mayhem of the big cities of Sao Paulo and Rio de Janeiro.

Http://offplanpropertyworld.com/invest-in-brazil.asp

Joseph asks…

why does the Fed have incomplete control over the money supply in the U.S.?

is it because the banks are already fully loaned up or because the public’s cash deposit ratio may change over time?
I JUST WANT TO KNOW IS BECAUSE THE BANKS ARE FULLY LOANED UP OR BECAUSE THE PUBLIC’S CASH DEPOSIT RATIO MAY CHANGE OVER TIME

Justin answers:

In a word mismanagement – details later.

But first you must realize that the Fed is not actually an agency of the government. It is a private bank that is owned by a number of other banks and elite families. If you don’t believe me read “The Creature from Jekyll Island” – it tells all about the creation of the Fed and how America was sold out.

The Fed is in the business of keeping the People happy – or at least keeping them from arming themselves and marching on Washington.

To do that they have to try to keep the country going and to prevent financial institutions from going under. They do this by creating $billions every day and giving it to banks (at interest of course).

Without Ben’s “helicopter drop of money” daily, the entire financial house of cards that has been constructed on worthless bits of paper would come crashing down – along with the markets.

The current problems stem from the practice of bundling mortgage loans together into “mortgage-backed securities” and selling these to funds and other financial institutions as investments.

Normally a fund cannot own an investment that is not rated at AAA – and so cannot normally invest in mortgages. However a slick deal was done whereby if the risk is spread by bundling a whole bunch of mortgages into a single security – somehow magically this becomes a triple-A rated investment!

Now te mortgage lenders were not particular at all about who they loaned money to…just so they could get a bunch of mortgages to bundle and sell off. Now a lot of these mortgages are being foreclosed because the people who bought the houses can’t afford them – jobs are being lost to India and China, mortgage rates are resetting at higher interest, and property values are dropping, because they were inflated too high and also because more people are trying to sell.

Some people bought several houses on interest-only mortgages. They figured that with values going up so fast they could sell in a year or two and make a bundle. Now the values are dropping to the point where people owe more on a house than the house is worth. So they just walk away from the mortgage because they have no real equity in the houses.

So the funds and banks that bought these Mortgage Backed Securities are now stuck – these are no longer AAA rated investments and so the funds must get rid of them – but nobody wants to buy them now.

That is why the Fed must create all of this bogus money and just give it to the banks at really low interest rates so that the funds and the banks won’t collapse.

However, according to the laws of supply and demand – when there is more of something its value goes down. That is what is now happening to the US dollar – it is sinking in buying power (and so it looks like prices are rising), because so many dollars are being created daily. The money supply is increasing at about 20% annually – that is the REAL rate of inflation that the Gov. Is trying to hide.

So the $ decreases each year in what it can buy, and there is nothing the Fed or the Gov can do to stop it – not that they really want to. You see the Gov. Has spent so much money that it didn’t have on foreign wars etc. And now they can’t possibly pay it back. So decreasing the value of the dollar makes it easier for them to pay back foreign loans – and screws the foreign lending banks and institutions. That is one reason that some oil-producing nations are now demanding Euros for their oil.

A tip: Buy yourself some .999 pure silver coins or bars and stash them away (and NOT in a bank safe-deposit box). The time will come when you will be glad you did.

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