02 March 2009

Obama's Economic Advisory Video Found!

Since we're going to be increasing the money supply to pay for the Messiah's "Stimulus Plan that Won't," I figured I'd do a little work to discover what those wonderful folks running the show up in Washingon DC were smoking. Turns out it's the special "Presidential Hash." But I did find that video from 1933.

If inflation worked like that, we should just have the government print out $100 trillion dollars, and we'd all be gadzillionaires! History, however, proves that when inflation rises, production is cut back, because whatever money we put into making something today won't be reimbursed when we try to sell it. If you put $10000 into making a new car, but then the value of the dollar drops by 10%, the price of the materials in the car is now $11000. You have to sell the car for more money, or you sell it for less profit (and less incentive to spend the money on the materials in the first place).

This is why gold and other commodities do so well during inflationary periods. Gold has a relatively fixed price, and when paper money is devalued, the price of gold seems to increase.Ah, the joys of Obamanomics. High inflation, high unemployment, higher prices, higher taxes. See? We're gonna get some of that Presidential Hash after all! It just doesn't produce the high you thought you were gonna get.

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