Why Printing Money Won’t Solve the US Recession Problem?

Why Printing Money Won’t Solve the US Recession Problem?

All of you know that the US Economy, the largest economy in the world is right now in trouble. It is going into the phase of Double dip (W-Shaped) recession means the short period of recover it is again slipping back into the deep recession.

But do you know that how the US Government is tying to solve this problem? Well, by printing more money (Dollars) out of thin air. To get out of this recession (And probably the Depression), the US Government is printing money out of thin air like hell.

Since 2007, the USA has doubled its monetary base (Money Supply / Money in the Circulation). before 2007, the US Monetary base was just $ 800 Billion and today it is $ 2000 Billion ($ 2 Trillion). This, US Government has printed literally new $ 1200 Billion ($ 1.2 Trillion) out of thin air to recover from the recession.

And not only this but it is going to print still more $ 1 Trillion out of thin air in the near future (Probably in 2011).

But well, Do you know that printing money like this won’t solve the real problem? In fact, it will worsen the recession. Here is how?

Well, Right now most of this printed money is in the Bank reserves. But when this money will enter into the circulation, it will markedly dilute the purchasing power of the existing dollars by causing the hyperinflation.

Well, yes. Once this much money will be in the circulation, it will cause hyperinflation and the prices of all the assets, goods and services will go up to the sky high levels.

And unfortunately, the salaries of people working in the companies won’t hike at this much sky high levels. Not only this but because of this money printing activity of the US Government, the people who are living on the Pension Plans income won’t be able to live on their pension income.

And on the top of this, people who are in their fifties and waiting for the financially peaceful retirement won’t be able to retire peacefully on their pension plans and retirement savings.

Saving money will be worthless very soon. This is because money will lose its purchasing power very soon.

So How to Become Rich in such kind of Conditions? Well, by creating and acquiring assets. An Asset is something which puts money into your pocket weather you work or not.

And that’s why the basic understanding of the words like Assets, Liabilities, Financial Statement & Cashflow is very very important. Unfortunately, Schools don’t teach us these words and that’s why we remain financially struggling and middle class for the rest of our lives.

You can Download my eBook My Journey To Billionaire Club: What Rich Teach Their Kids about Money but Poor and Middle Class Don’t? for FREE without any annoying registrations and get this real financial knowledge that rich people from all around the world are giving to their kids but poor and middle class don’t.

I have worked very hard to write this eBook to spread the real financial education that is not being taught in our schools. In my Book, I have explained in detail that how you can print your own money legally and what you should do rather than saving money.

So Download my FREE eBook and yes, don’t forget to spread this Financial Awareness.