The terrors of rampant inflation.
---May 31, 2013---
should you buy gold?
Itís no secret that governments around the world are printing money like there is no tomorrow. This despite the fact that many responsible financial commentators agree that printing money is a major cause of inflation and also conclude that the result of all this printing is almost certainly going to be serious inflation. (Look at Zimbabwe!)
However, some politicians point to F. D. Roosevelt and say that he printed money for his New Deal without any ill affects and they use this argument to try and lull the publicís fear of coming inflation.
But these politicians forget to mention that Roosevelt began his presidency by confiscating all the privately held gold in the country and paid everyone the then price of $20 an ounce. After this he put all this gold, along with all the gold held by the US government, into Fort Knox and raised the price of gold to $35 an ounce. This meant that theoretically at least, all the money Roosevelt printed was backed by gold and this strategy was helped by the fact that the rest of the world accepted $35 as a new standard price price for gold.
So, Roosevelt didnít really do any quantitative easing. All the money he printed was backed by the new price of gold.
But looking around todayís world itís clear that things are different. Even large corporations are now afraid of inflation and, if they are afraid, why shouldnít you be?
For example, in the small print of many mobile phone contracts there is now a clause which allows the mobile phone company to raise the contract payments by the rate of inflation. With the amounts of money that are being printed around the world, this means that inflation could reach 30% or more and someone with a mobile phone contract might see their payments being raised by a similar amount. However, if their take home pay doesnít keep pace with inflation, they could find themselves in serious trouble. A trouble made even more serious by the fact mobile phone companies sell their bad debts to debt collectors and everybody knows what debt collectors are like! They have even been described by some as: Animals. Salivating Dobermanís and Bull Mastiffs hungry for blood. On top of this are all the extra 'collection' charges they can add to the debt theyíve bought.
So if youíre not a very rich person, you should certainly fear your mobile phone contra
Previous Home Next
---May 31, 2013---