Quantitative Slipping to Monetizing Sliding

I just read a very lucid explanation of what's going on with the money.
Chris Martenson, posting on Seeking Alpha.com, explains clearly how the Federal Reserve's QE2 maneuver amounts to printing money to pay off our accumulated financial obligations.It's what economists call "monetizing the debt." He distinguishes between QE1, that was designed to bring the banks back to functionality, and this new QE2, which will be funneled mostly "to the government."

He points out there is a difference between our Fed's strategy for handling this problem and the strategy that the UK has adopted. The Brits have chosen fiscal austerity, while we have opted for monetizing, or printing money, that can then be passed around as if it had value. Maybe it does have value, but for how long?
It seems our English allies across the pond have chosen to begin facing the consequences of their credit binge, while we continue to roll ours over to next month's charge. Furthermore, Mr. Sarcozy, in France, has also figured out that you can't put off public debt obligations forever, and he is willing to pay the political price for his belt-tightening policies. Its too bad if our government, both executive and legislative, doesn't move in a similarly responsible direction. Maybe with these new recommendations from Mr. Bowles and Mr. Simpson, we will. Ha! We shall keep an eye on them.
Meanwhile, across the globe the response from other G-20 governments, most notably Germany, Brazil and China, is decidedly negative and critical about this second phase of quantitative easing. Understandably so. We're refusing to play by the common rules that mankinds has established.On th other hand, the nation of India, God bless ' em, doesn't seem to mind what we're doing. I guess its helpful to have at least one friend who is willing to look the other way while we further leverage our irresponsible lifestyle into the stratosphere of unprecedented deficiting.


Mr. Chris Martenson, mentioned above, whose explanation of these developments is readily understandable to this regular guy (me), had predicted three years ago that something like this would happen. He says that he has made prior provision for the dire circumstance by investing in gold and silver. And yes, we've heard in these last few months that many others are doing the same, looking for a safe place to park their assets in this peculiarly precarious era of pecuniary peril. Meanwhile, the Krugman crowd wonders what these doomsday hedgers appreciate about gold. They will learn that inconvenient lesson soon enough.


But what about me? What strategy do I, the little guy, the average citizen, employ to protect my minimal nestegg against the ravages of fiscal meltdown that lie ahead?
Jesus loves me, this I know.

You think I'm naive?
I survey our contemporary culture of criticism and surmise that the really smart people of our evolved society wonder why so many of us "working class" folks insist in believing in God when its been proven several times over that he doesn't exist.
Well, for one thing: we have no choice. In the end, God is all we have as our hedge against Social Security insolvency or some such calamity, which could include another economic meltdown, or it could be, simply enough, death itself. The big one will catch up with every one of us sooner or later.
But hey, I'm making a few provisions too. They aint in gold, though, because I cant swing the $1400 per ounce. Well, that's not the only reason; I could probably come up with the one and half grand if I had to.
My measures started thirty years ago when we drove stakes in the ground and settled our family in this small city of Appalachia. Its here, on a north slope, two miles from town, we'll be leaning on the productivity and goodwill of those old friends and and neighbors with whom we now find ourselves ensconced in the golden years of life. So that's our gold. What's yours?

Oh, btw, one parting thrust of (probably) futile protest. For our Treasury Secretary, Mr. Geithner, to accuse the Chinese of currency manipulation while we continue to kite rubber checks around the world is blatant hypocrisy. Furthermore, for our Congress to prove its impotence by failing to at least address the problem is courting disaster. We've devolved from having the best government money can buy to having the worst.
And another thing. (OK, maybe this is two parting shots:) If Congress is unable to act decisively upon the recommendations offered by Mr. Bowles and Mr. Simpson, then the time has finally come to stuff some of those Federal Reserve notes in the old mattress, like great grampa and granma did back in the former times. Stash those greenbacks for January when we might need a fire or two in the wood stove.

But just for the record, I'm still willing, as a citizen of the United States of America, to ante up a little of whatever it takes to get us out of this predicament. Are you?
Carey Rowland, author of Glass half-Full