A Spooked Economy in October
Source: Safe Haven, Ron Paul††(10/11/10)
"We are reaching a crucial point the dollar will no longer function."
In 1971, GDP was $1.29 trillion. Today, it is $14.6 trillion, nominally. But adjusted for all the inflating the Fed has been doing, it is only $2.73 trillion, which constitutes just 1% real increase per year!
With all this extra money going around, we may appear nominally wealthieróbut we've barely moved at all. Hardest hit are the prudent, conscientious savers, whose nest eggs are constantly being devalued. Unless of course, they have saved in something out of the Fed's reach, like gold. While the economy has been in a holding pattern against the Fed's wealth leeching for 39 years, gold has seen an inflation adjusted increase of >5%/year due to the Fed's ability to multiply dollars.
The government finds ways to spend money even faster than the Fed creates it, bringing our national debt well past the point of taxpayers' ability to pay it off. Nations once eager to buy up U.S. debt are now starting to resist. We are reaching a crucial point at which the dollar will no longer function; and, in the absence of a functioning dollar, restoring sound money will be the only alternative.
The truly scary notion is that those in power might allow our system to collapse so chaotically to the detriment of so many people rather than simply obey the Constitution.