Money Supply

With the governments bailout of the financial sector for $700 Billion, the proposed auto bailout for a measly $15+ Billion and Obama's proposed economic stimulus package of who knows how many Billion, am I the only one worried about what is going to happen when all the money that is being printed by the Government for these bailouts get into the economy? One look at Zimbabwe and you see what happens when the government runs the printing presses throwing more money into the economy. Hyper-inflation. <br />n<br />nIt actually turns out <a href="http://www.bizjournals.com/phoenix/stories/2008/12/08/daily35.html">I am not the only one worried</a>.<br />n<br />n<blockquote>But economists have warnings for Obama’s public works stimulus plans as well as the bailouts. That includes some economist worried, though they are split, that the bailouts, liquidity infusions and stimulus outlays — which now total $8.5 trillion — could result in inflation and a weakened dollar.<br />n<br />nPeter Schiff, an economist and chief global strategist for Connecticut-based Euro Pacific Capital, worries the bailout and stimulus money could result in hyper-inflation because of all the money being pushed into the economy by central banks and the federal government. Schiff worries the markets and consumers could lose confidence in the U.S. dollar.<br />n<br />n“It’s very easy for the public to lose confidence, especially when the government is printing too much of it, which is what is happening in our economy. The government is trying to create additional consumer spending and they are trying to do it by printing more money,” Schiff told Toronto-based IWT-Real News Network.<br />n<br />nSchiff, who predicted the current financial and subprime downturns, said a worst-case scenario would be an inflation-fueled depression of the U.S. economy.<br />n<br />nHyper-inflation occurs when prices rise as currency values and confidence diminish. Hyper-inflation has periodically hit Third World economies such as the present situation in Zimbabwe and in post World War I Europe including Germany.</blockquote><br />n<br />nI know, I worry too much but this really has me concerned. What is going to be the cost to us of all these bailouts and economic stimulus? Will the cost be too high? How can we protect ourselves? I wish I knew the answers to these things.<br />n<br />