Lately, there has been a lot of talk on the news about the fiscal cliff that the US is facing. The President is tired of fighting with Congress about raising the debt ceiling and thinks the debt ceiling should be eliminated. Currently, the US debt has surpassed $16.3 trillion and is quickly roaring towards $20 trillion. Even though the majority of Congress are Republicans and claim to be fiscal conservatives, no one is doing anything about the excessive spending and expansion of the government over the last four years. The only industry that has been immune from the economic downturn is the federal government. The US is quickly heading towards bankruptcy and no one has put on the brakes. Historically, the US has been able to print its way out of trouble because the US dollar is the reserve note of the world and what is used to trade internationally, mainly oil. The more they print, the less the dollar is worth. What the media won't talk about is the inflation that's been caused by all this quantitative easing. Four years ago, a gallon of gas was less than two dollars and now it's close to four dollars. I don't know what they call it, but I call that inflation and it's pushing many Americans into losing their homes to foreclosure and filing bankruptcy.
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Most people don't understand what QE 1, QE2, The Twist and now QE3 are and what they do. The term quantitative easing has been thrown around loosely. In a nutshell, the Federal Reserve is printing money and giving it to its member banks to buy back US treasuries. If printing money was the secret to economic success, the government could fire up the printing presses and give everyone $1 million and everyone in the US would be millionaires. In reality, all this does is render the currency worthless. As the government is printing their way out of debt, Americans are being saddled with massive amounts of debt that they didn't sign on to. Many Americans will be filing bankruptcy in the next couple years because of these irresponsible financial decisions being made by a few.
I have always been told to learn from history because it will repeat itself with the same mistakes that are being made. Back in 1919, the Weimar Republic had an exchange rate of 12 German marks for one US dollar. Sadly enough, they believe that quantitative easing would get them out of financial trouble and they began printing German marks to bail themselves out of debt that was imposed by The Treaty of Versailles. Because of this decision, by December 1923, it took 4 trillion German marks to get one US dollar. An old joke about the Weimar Republic was if you left a wheelbarrow full of German marks sitting out, a thief would steal the wheelbarrow and leave the money behind. As history is once again repeating itself, if quantitative easing didn't work for the Weimar Republic in the 1920s, it won't work for the US now.
Many Americans are now wondering what is in the future for our struggling economy. People struggling to get by should consider consulting a bankruptcy attorney about filing bankruptcy. Many times, kicking the can down the road will only make the problem worse. Sometimes it's easier to take the pain quickly and then begin the healing process. In the past, our grandparents prided themselves on the debt free. Now, Americans have gotten themselves so far in debt they are only three weeks away from filing bankruptcy according to a recent study.
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