What is QE2 and why did we need it?
OK the fed thinks deflation is bad.
Since the fed was created by Woodrow Wilson in 1913, the value of our dollar has lost 97% of it’s value. Since Nixon’s administration took us off of the modified gold standard, the value of the dollar has lost over 80% of it’s value.
That is called inflation when your dollar loses value.
We allegedly needed QE2 to keep from having deflation. If inflation decreases the value of your dollar, and deflation is the opposite of inflation and increases the value of our dollar.
Can you explain to me why deflation is bad?
Well, actually deflation is not bad, just really hard to deal with. At some point in the past, the government decided that it was in the best interest of the country for many people to own their own home. If you have a mortgage payment and we experience inflation, the house payment stays the same, but the salary goes up. Of course, other prices go up too.
However, if the value of money increases then the house payment increases in the percentage of the income which it consumes and that keeps everyone unhappy. Retailers, service providers, governments, and institutes of higher learning are loathe to reduce their prices, fees, taxes, or tuitions so each of these things go up in cost. If people got used to a constant deflation, some of that might be adjusted more easily, but it is easier for these groups to deal with inflation than deflation.
|
Indian Head Nickel (1913 – 1938) Two Tone U.S. Coin Hinged Money Clip
$47.57
This real U.S. coin is first layered in pure bright silver. Then, by hand, the figure is highlighted and brought to life with rich, pure 24K gold. This breathtaking and exclusive work turns the coin into a stunning and true work of art. Each coin is hermetically sealed against wear in a clear, hard acrylic coating. It is then mounted in a patented hinged clip and placed in a jewelry box.Please Not…
|
