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September 1928 – 650,000 unemployed
September 1929 – 1,320,000 unemployed
September 1930 – 3,000,000 unemployed
September 1931 – 4,350,000 unemployed
September 1932 – 5,102,000 unemployed
January 1933 – 6,100,000 unemployed
By the end of 1932, over 30 percent of all German workers were unemployed. This created an environment where people were hungry for “change”.
On January 30th, 1933 Hitler was sworn in as chancellor, and the rest is history.
So where will all of this money printing take America?
As I wrote about in a previous article, the amount of excess reserves that banks have stashed with the Federal Reserve has risen from about 9 billion dollars on September 10th, 2008 to about 1.5 trillion dollars today….
What is going to happen to inflation when all of those excess reserves start flowing out into the regular economy?
It won’t be pretty.
Just consider the ominous words that Philadelphia Fed President Charles Plosser used earlier this week….
“Inflation is going to occur when excess reserves of this huge balance sheet begin to flow outside into the real economy. I can’t tell you when that’s going to happen.”
“When that does begin if we don’t engage in a fairly aggressive and effective policy of preventing that from happening, there’s no question in my mind that that will lead to lots of inflation.”
And so what is Bernanke doing?
He is printing up lots more money.
But isn’t this supposed to help the economy?
I wouldn’t count on it.
According to USA Today, the following is what Plosser says about the effect that QE3 is likely to have on our economy….
“We are unlikely to see much benefit to growth or to employment from further asset purchases.”
But we will get more inflation, so our monthly budgets will not go as far as they did before.
The other day I was going to the supermarket, and my wife told me that she wanted some croissants. When I got to the bakery section I discovered that it was $4.49 for just four croissants.
If it had just been for me, I would have never gotten them. I am the kind of shopper that doesn’t even want to look at something unless there is a sale tag on it.
But I did get the croissants for my wife.
Unfortunately, thanks to Federal Reserve Chairman Ben Bernanke soon none of us may be able to afford to buy croissants.
I still remember the days when I could fill up my entire shopping cart for 20 bucks.
And it was not that long ago – I am talking about the late 90s.
But paying more for food is not the greatest danger we are facing. Bernanke is destroying the credibility of our currency and he is destroying faith in our financial system.
Bernanke may believe that he is preventing the next great collapse from happening, but the truth is that what he is doing is going to make the eventual collapse far worse.
Better get your wheelbarrows ready.
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