Why is the price inflation rescue

It is often said that politicians can not solve a problem of throwing money at him. The same is true for bankers and economists. Credit Crunch is the proof.

What happens is this. Major banks in almost all Western countries have lost billions of loans that have not been repaid and has not been done before. Now that an application for a government rescue of the ban in all others, and take with them. If only smallcompanies could do the same when they lose money in a company.

The government pledged to bail them out to borrow money from the central bank (for example, the Federal Reserve, Bank of England). But where is the central bank takes the money?

Easy. Money is created out of nothing. Let me explain. In September 2008, the Fed has increased the budget of more than it was in the 86 years of its existence (Agora Financial October 3, 2008). Around 2000, his"Heritage" of about $ 700 billion. This number has increased by almost 50 billion dollars a year until September 2008.

In September alone, the Fed has increased its activity by an astounding U.S. $ U.S. 600 billion. This means that 600 billion dollars created out of nothing and loaned the money, "particularly the United States government to be injected into the economy through banks that have lent the promise to pay the money now.

Now, what really make the economy of the United States? Andthe economies of other countries come here. Well, take the gold, for example. In July 2008, before the financial crisis becomes a disaster, the total value of all the gold in the world (surface) was estimated at 4.2 billion U.S. dollars. With the better part of a trillion dollars, in addition to all the billions of other gold price, currently suspended in 1000 U.S. dollars per ounce, ready to take off dramatically.

The same, of course, applies to everything you can imagine. Isobvious, actually. Pump more money in the economy without a corresponding increase in the quantity of goods and services circulating in the economy, that is less in comparison, and therefore inflation.

Thus, hyperinflation is the price of toxic rescue the banking system.

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