NC FREEDOM

Your Dollar Was Just Devalued By 24%


The highly anticipated announcement by the Federal Reserve for “quantitative easing” or QE II was met with a controlled response on Wall Street. The Fed was expected to buy $500 billion worth of bonds which would have devalued the dollar by 20% over the next few years (or sooner). If this is a linear relationship, then $600 billion will devalue the dollar by 24%. The dollar has been devalued by 12% in just the past two months. It does not take a speaker of the house to see where the fruits of our labor have gone and will continue to go. By devaluing the dollar, the Obama Socialist Project accomplishes two goals at once.


The first is to reduce the actual debt and federal obligations through hyperinflation. The people who have bought our debt or rely on government handouts will receive less than what they were expecting. The second is the all too invasive redistribution of wealth from the producers to the “disenfranchised”. This disenfranchised portion of our nation will continue to grow and vote so that the ever decreasing American work ethic will continue to decline in favor of a government dole. Unfortunately for the future of our children, this will result in consequences that our founding fathers warned us about and which our apathy has expedited in just a few short years.

How has this news impacted the stock market? The market plunged over 80 points in ten minutes. However, the magical federal reserve stepped in and shored up the market as it does any time the market goes down since early summer. So your 401K plan is safe at this point but this manipulation of the market will not continue forever and you will see the fallout personally.

David DeGerolamo

http://ncfreedom.us/2010/11/03/your-dollar-was-just-devalued-by-24/
Here is the Federal Reserve’s statement:



Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.



Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.



To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.



The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.



The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.



Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.



Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits. Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.

http://ncfreedom.us/2010/11/03/your-dollar-was-just-devalued-by-24/