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Back You are here: Home Columns Weekly Columns For Your Consideration For Your Consideration: Ben’s Move

For Your Consideration: Ben’s Move

By CHARLIE ALLO
Contributing Writer

It would appear that we are in for another “quantitative easing” (QE) 3; the easing of the money supply seems to be losing its punch with each additional effort to pump money into the system.
The Senate is disinclined to address the Nation’s fiscal problems; it would seem that our government officials have no clue as to why we are in this economic quandary.
One might suggest that our representatives take a closer look at the actions they have taken over the past decades; it’s certain they have little understanding of the basic principles related to capitalism. Government oversight is essential for a functional capitalistic system,
but that oversight should be applied to areas that are apt to be corrupted by some of man’s more base tendencies.
Evidently the use of legislation to enhance the politician’s power is one of the actions that should receive some attention.
The electorate should be concerned when the Fed Chairman, Ben Bernanke, starts to print money; this action is having an adverse impact on the value of the dollar.
Some of the increases we are seeing in food and energy are related to the additional money being pumped into the system by the Federal Reserve.
The increases that one sees in food and energy are more evident because they are essential items that are require on a daily basis, but these increases are being reflected in every product
that is bought.
Many people are feeling good about the value of their stock, but most of this increase is really the result of a devalued dollar.
Something that most people don’t think about is that when they pay taxes on their capital gains for a long held stock the gain is figured on the purchase price and the current sale price; the problem with this is that there is no compensation made for the declining value of the dollar during the intervening years. In the end the investor’s gain may actually be a loss by the time the Internal Revenue gets finished with you; this is not something that escapes many of our political leaders when they are drawing up legislation. 
One clear way to grasp what we are doing with our economy is to go back forty or fifty years and price some of the merchandise that is still available to get some idea of the devaluation of the dollar, and when you’re making these comparisons remember that the content, in all probability, was greater than today’s’ product.   This round of quantitative easing intends to inject, at least, forty billion a month into the system, and there is no time or amount limit on this move: the termination point will come when the economy has been stimulated enough to sustain itself without further infusion of capital from the Fed. One really has to question the Fed’s reasoning; this position appears illogical given the current set of conditions in this country and around the world. One can only hope that our businesses can ride this rollercoaster and come through it in one piece.
Either the politicians are incapable of resolving the fiscal problem, or they are too afraid to tell the electorate the true condition of the country’s economy. 
It would appear that things are going to continue to go downhill. The country had a revolution to get away from high taxes levied on the colonies by King George, what we have created makes King George look like a saint.
It’s time to stop listening to those who suggest that our Founders are out of date; the advice they gave us when the Nation was formed is still valid.