Obama & Fed impose 20% tax on all Americans

President Obama defended the Fed’s decision to implement a second Quantitative Easing (QE2)
amidst disagreement by fellow G20 countries China and Russia. Both countries stated that they
believe the G20 should have been consulted before the United States followed through with plans
to print more money and begin purchasing its own debt.

A little over a year ago Fed Chairman Ben Bernanke swore under oath that he would not monetize
America’s debt. For those that don’t quite grasp the concept, we are essentially borrowing the
money from ourselves by issuing bonds (IOU’s) and then printing money to purchase the bonds
from ourselves. By printing billions of additional dollars the Fed is purposefully causing inflation,
which, by Chairman Bernanke’s own admission, is a tax increase. That’s a neat trick, maybe I’ll
pay my mortgage with Monopoly money next month. I could use a Quantitative Easing just in time
for Christmas.

Many top economists believe this second massive printing of dollars by the Federal Reserve will
cause a dramatic decrease in the value of the dollar on the world market. Bill Gross who manages
the world’s largest mutual fund asserted that the Fed’s move will ‘devalue the dollar by as much
as 20%.”

Currently inflation is hovering around 3.4% for the year according to the Bureau of Labor &
Statistics, however, if you utilize the old method of calculating inflation it is closer to 8%, which, if
Gross is correct, is a 28% reduction in purchasing power.

Of course President Obama would support the Fed’s choice to unilaterally implement a back-door
tax increase on the American people. Now when Congress moves to extend the Bush tax cuts, he
will look like the savior when he signs the extension just in the nick of time, preventing everyone’s
tax bill from increasing in 2011.

Imagine if they don’t extend the Bush tax cuts; what are the implications then? Say you are in the
bottom tax bracket which will see a 50% tax increase on January 1st plus the 28% reduction in
spending power due to the inflation resulting from the administration’s financial policies and these
people are now only taking home 22% of their paycheck. The administration will have no choice
but to expand social programs on an unprecedented scale so that these people can make ends
meet. Where will that money come from? I know, we’ll just print more.

The other theory I want to postulate is that the massive increase in credit the previous two decades
(one could argue back further than that) was really a covert method to create inflation. Why else
would the government continue to push trillions of dollars in loans when they knew they were
going to end up in default? This was especially evident in real estate, cars, and credit cards but
was done without increasing the supply of money which continues to pour out of America since we
no longer manufacture anything.

You are not hearing much about it yet but there is still an impending $1.4 trillion commercial real
estate bubble that is expected to burst in the next couple of years. Where is that money going to
come from?

The likely scenario will be that the administration will fire up the printing press and then take
advantage of the clause they inserted into the Wall Street Reform Act that will allow them to seize
control of these companies and their assets, which will nationalize even more industry and give
the government unprecedented control of banking and real estate in the United States.

Another item that continues to go unnoticed by the mainstream media is that Fannie Mae and
Freddie Mac continue to purchase toxic assets (foreclosures) on the open market. Why would the
government continue to do this when we already know that both entities are going to require
another bailout? Could it be that when these final cards are played and the government seizes all
of these assets that they become the largest banker and landlord in the country?

Regardless of how you look at the financial policies of this administration, you cannot help but
conclude that when the cards start to fall, the whole house is going to come tumbling down.

Todd Kinsey is an independent writer from Houston, Texas. His articles have appeared at the
examiner.com, the GOP Journal, and the Coastal Conservative. He has appeared on several radio
talk shows and publishes his own website toddkinsey.com. To arrange guest appearances or
speaking engagements, you can contact him by email: todd@toddkinsey.com

© 2010 - Todd Kinsey - All rights reserved

Resources:
Obama defends Fed - http://www.reuters.com/article/idUSTOE6A706720101108
Bernanke under oath - http://www.youtube.com/watch?v=n6qo2S84r5w
Bernanke tax increase – http://www.youtube.com/watch?v=yZ5aLNd8lcM
Bill Gross says 20% - http://www.prisonplanet.com/the-fed-no-longer-cares-about-hiding-the-fact-it-
is-killing-the-dollar.html

Inflation 3.4% - http://inflationdata.com/inflation/Inflation_Calculators/Inflation_Calculator.
asp#calcresults

Inflation really 8% - http://www.shadowstats.com/alternate_data/inflation-charts

$1.4 Trillion commercial real estate bubble - http://www.huffingtonpost.
com/2010/02/11/commercial-real-estate-a_n_458092.html

Obama & Fed impose 20% tax on all Americans
By: Todd Kinsey
Tuesday - November 9, 2010

Courtesy: Steady Habits

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