How to Become Exempt from new "Monetary Tax"

The massive bailouts of 2008 and 2009 (and continuing today) not only changed the way our nation conducted its fiscal policy, but its monetary policy also. The enormous amount of spending by our government -- at a pace that increases the deficit annually at a rate higher than our total debt a few decades ago -- has been breathtaking to observe.

As a result of such spending, government is mass producing money to pay its bills. The government loves this approach to solving its problems for several reasons. First of all, since the government prints the money and release it first, it enjoys this "funny money" at its highest value. It is only after it circulates through the economy that it loses its spending power and reduces the value of all other dollars in the market. Inflation is defined as "too much money chasing too few goods." High prices is only one of the many symptoms of such a policy. In addition, inflation plays on the ignorance of a population who has no idea that these increases in prices are caused by the mass production of devalued dollars. Most voters will blame businesses for their "greed" and price raising, not the politicians who make such a phenomenon necessary. Simply put, every new dollar pumped into the economy takes away the value of all the dollars in the market, unless there is a comparable increase in productivity.

In one day in 2009, the United States took a chapter out of Zimbabwe's playbook by pumping $1.2 trillion into the money supply in an attempt to pay off its bills. Many Americans have (rightly) been alarmed by the more than $1.5 trillion we have seen in bailouts. According to the Washington Post, these inflationary efforts have the potential of being much more far reaching, noting that "combined with the billions already deployed by the Fed, the new money dwarfs even the biggest government bailouts of financial companies."

Historically, this type of monetary policy leads to the kind of inflation that we have seen in history books, where it is cheaper to use money for wallpaper than to buy it or it requiring a barrel of money to buy a loaf of bread. Printing worthless money will not make our problems away, but make issues we never imagined.

The purpose of this inflation is to serve as a tax by taking away the value (rather than the actual dollars) of all the money we hold. This is, however, one tax we can fight against, according to Albert Lu of Woodlands Bullion, a leading authority on precious metals and a contributor to the Price of Business radio show. Lu has stated many times that Americans can reduce their "monetary tax" burden with every precious metal purchase they make. Gold, silver, and other precious metals are at an all time high because of the inflation we have suffered over the last two years. It is only expected to get worse. Precious metals are a tool for shoring up the value of money. As the money supply is inflated, those with gold or other precious metals will see their wealth enjoy a greater level of protection and their "monetary tax" burden greatly reduced. Those who do not move towards precious metals either do not fully appreciate our current economic crisis or are as apathetic as the millions of Americans who still sit on the sidelines rather than participate in the most important political battles of the day. People need to make a difference in the national economy through elections and their personal economies through precious metals.

The US uses Zimbabwe as an Economic Model

Americans are being bombarded on numerous fronts -- AIG executives getting outrageous bonuses with taxpayer dollars, the government is bolstering illegal immigrants, Obama is placing pressures on states to restore the welfare state, etc., etc., etc. However, the biggest issue of concern to all Americans may be happening and getting a complete pass by the mainstream media. That is the paying for massive new government programs through the mass production of worthless money. Money, according to the New York Times, "printed out of thin air."

The United States government is using inflation, which is the most harsh form of taxation of all, to pay for its out of control spending. Inflation isn't merely "high prices," although that is a symptom of such a policy. Instead, inflation is "too much money chasing too few goods" and in this case for the purpose of paying for government. If the number of dollars go up, the value of that currency goes down. This results in higher prices, a decline in investment, and economic instability.

All of us are familiar with the history classes where we have seen Germany's inflation that resulted in a wheel barrell of money being required to pay for a loaf of bread. This inflation created such economic havoc that it created the perfect environment for Adolph Hitler to rise to power. It became so bad that it was easier and cheaper to use money as wallpaper than to go to the store and buy such.

In addition to destroying the value of our money, inflation is a horrible form of taxation. When our prices begin to go through the roof, our largely uneducated public will often blame business over government for the terrible changes we will witness. Inflation is the government's cowardly way to pay for its irresponsible programs.

Very few legitimate countries use inflation as a means to fund their governments. That policy is typically relegated to places like Iran (17 percent), Burma (35 percent), and Zimbabwe (231,000,000 percent). The last country's situation is such a disaster, it has 85 percent unemployment and the people are grateful it is only that high, with a worthless currency fueling that job market.

Just this week the United States took a chapter out of Zimbabwe's playbook by pumping $1.2 trillion into the money supply in an attempt to pay off its bills. Many Americans have (rightly) been alarmed by the more than $1.5 trillion we have seen in bailouts. According to the Washington Post, these inflationary efforts have the potential of being much more far reaching, noting that "combined with the billions already deployed by the Fed, the new money dwarfs even the biggest government bailouts of financial companies."

When the currency is ravaged by an inflationary money supply, the first place to turn to is to precious medals. Jay Hancock of the Baltimore Sun noted that "yesterday the Fed announced it would inject more than $1 trillion in the economy by buying longer-term Treasuries and mortgages. As Yves Smith notes, even the $300 billion the Fed pledged for Treasuries may not have much effect, given the huge supply of bonds the government needs to sell to finance the ballooning deficit. Gold is soaring, presumably on the expectation that the Fed's move will undermine the dollar and stoke long-term inflation. It's up $60 this morning. Has there ever been a bigger intraday or daily increase?" Precious medals should only go higher.

History has shown that "pumping money" into an economy to pay for government programs has always resulted in massive damage to a country. It is typically the last resort of third world governments on the brink of economic ruin. We have entered a very dangerous stage in our nation's history.

Kevin Price is Host of the Price of Business, the longest running show on CNN 650 (M-F at 11 am). Eric Bolling of Fox News and Fox Business and says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com.