TruthMission

This shows the inflation is not necessary and is a result of an increase of the money supply.

More videos can be found at ChrisMartenson.com

Press TV
December 24, 2008

The Iranian president calls on a regional economic body to abandon the US dollar in order to reduce the effects of the financial crisis.

In a Tuesday speech to a meeting of the Economic Cooperation Organization (ECO)*, President Mahmoud Ahmadinejad said the 10-member group of Asian nations could adopt a single currency instead of the US dollar to shield their financial systems from the negative impacts of the global economic crisis.

*ECO was originally founded by Iran, Pakistan and Turkey, but was later joined by the Central Asian states of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, as well as Azerbaijan and Afghanistan.

END

By decreasing the demand for US dollars you also reduce it’s value.  Click here for an explination of why.

Peter Schiff believes we will be seeing a lot of inflation (increased prices due to increase in the money supply) in the coming years and as a result we may see a “solution” from government called price fixing.

For example the price of milk might have a price cap of $5 a gallon.  This seems good on the surface but I assure you it is not.

Consumers will now buy more milk because it is relatively cheaper than other products.  Producers will not make as much money or even loose money when they sell milk so they will be discouraged to produce milk and they will focus on producing products that actually make them money.

The result of this will be a shortage of milk.  Now imagine this happening with bread, eggs, produce, etc.

Let’s just hope Peter Schiff is wrong.

Another economist I have a lot of respect for is Jim Rogers.  In this clip he talks about the Federal Reserve’s inflationary actions and why we are seeing temporary deflation.

He too believes we should abolish the Federal Reserve.