What Happened Last Week

Last week there was a lot more happening in America than reported. Of course everyone is aware of the change of power in the House of Representatives, and most people know Reid, Frank, Boxer, and Pelosi were re-elected. The political sage purported their own theories as to what happened, but last week was easy to explain: while the masses slept the informed went to the polls and voted. Throughout the constant barrage of political analyses there was one shift in the majority reported rarely; 19 state legislatures changed from Democrat to Republican majorities. The impact at the state level is the passage of conservative agendas, aligned with the will of the people: state influenced immigration controls, no gay marriage, gun rights will stop eroding, and we can expect more fiscal control of budgets.

In addition to the electorate changes, the twelve members of the Fed Open Market Committee, private banking individuals not elected by the people, forever changed our future. Although called “Federal Reserve” the “Fed” is as federal as “Federal Express”. The group of private bankers promised to purchase $600 billion of government bonds because our debt, traditionally the stalwart of confidence to the world, has no other buyers. America will look like the 1970s, interest rates will drop further, past the already historically low rates making home and car purchases cheaper, if you can qualify for a loan or have a job, but increased prices are inevitable. By monetizing our debt, our currency was devalued and therefore it will take more dollars to buy exports. Although it sounds complicated, in the coming months the cost of everything made in China will rise, our foreign food supply will rise in cost, and OPEC will want more dollars for a barrel of crude. Gasoline should easily reach $3.40/gallon by April as OPEC is demanding a minimum $100/barrel.

What happened last week was historical, America moved politically in a direction not seen since Reconstruction (1865), recognizing the failed policies of an out of control majority. Similarly, Europe has done the same, moving Right to fight Unions, pensions for life, and nanny-state mentality. What happened last week when the Fed announced quantitative easing will also change our lives. We the People will pay today and well into the future for printing money. As we were taught in school, the Fed needs inflation to grow the economy, but inflation is really a hidden tax on us, the people.