Ted’s essays

wish I said that

I’ve tried to explain it hundreds of times, but never said it better. The smartphone analogy is great. – Ted

Ignore These 16 Digits at Your Own Risk

Dear Laissez Faire Today Reader,

Thursday afternoon, the Federal Reserve revealed its holdings of U.S. government debt had increased to an all-time record of $1,696,691,000,000.

Yup, that’s $1.6 trillion dollars. Why is this so important?

Because the Fed has no money of its own. The money they used to buy the “U.S. government debt” was created by a few simple keystrokes at a computer in the N.Y. Federal Reserve building… created “out of thin air.”

Why should you care about all this?

Here’s why. Imagine if each person on the planet could snap their fingers and instantly create a smartphone. A fully functioning smartphone identical to what you can buy online.

What would that do to the price of these phones? The price would crash, right? Why would anyone buy one if they could create one with no effort for themselves?

This is exactly what is happening when the Federal Reserve creates money out of thin air. As more dollars are printed by the Federal Reserve, the existing dollars in your account lose value.

And it’s one of the most secretive and destructive threats to your way of life. And most people will never understand why. Take a look at this chart:


See that line jump almost straight up in 2008-09? It went from $800 billion to $2.8 trillion in just four years, making every dollar you own worth less.

What’s really scary is Ben Bernanke has promised to continue to increase that number by $40 billion a month through mid-2015. If he does, that’s another $1.2 trillion of new dollars making the dollars in your bank account worth less.

As more and more money is pushed into the banks, food will cost you more… travel… housing… medical care. Everything you buy will become more expensive.

But you can take some simple steps to protect your family, your wealth and your retirement… we lay out the details here.


Doug Hill
Director, Laissez Faire Club