Black Money in India Review

Black Money in India Review (Indian Black Money)

You may want to know that exactly how much black money is gone to the Swiss bank accounts by the Indian Corrupt politicians, top level government officials and business tycoons right?

Up to now, there was not any data analyzed such kind of black money outflow. But now, Dev Kar, The Leading Economist at US based Global Financial Integrity has come up with the accurate data of Indian Black money.

These Data about Indian black money are really shocking. According to the Chief Economist Dev Kar’s report,

the following are the highlights of the Indian Black money.

- India has been drained of $462 billion (Rs 20,556,848,000,000 or over Rs 20 lakh crore) between 1948 and 2008.

Well, Yes. Since 1948 up to 2008, almost Rs.20 Lakh Crore ($ 462 Billion) black money has been transferred to Swiss bank and other offshore bank accounts.

- The amount is nearly 40% of India’s gross domestic product, and nearly 12 times the size of the estimated loss to the government because of the 2G spectrum scam.

- The report found that black money to the tune of $22.7-27.3 billion a year has been leaving India over the five-year period, 2002-2006.

- A US state department report estimates that hawala transactions in India range between $13 billion and $17 billion annually, and present a security threat to the country.

Economists capture the outflow of black money in two ways—by estimating outflows that are unrecorded in the country’s external accounts and the ways through which residents can accrue foreign exchange abroad by under-invoicing exports and over-invoicing imports. Both these models can show illicit outflows as well as illicit inflows. Traditionally, economists have tended to take the direction of flows as they are and simply netted out inflows from outflows in a straightforward manner.

According to many economists, the above are the underestimated figures. The real figures are much higher than the above figures. This shows that how much lucrative country India is?

Every year literally billions of dollars have been transferred to the Swiss Bank and other offshore accounts illegally and there is not any track record of this money.

What is Quantitative Easing in Layman’s Language?

What is Quantitative Easing (QE) in Layman’s Language?

This is the amazing video I have come across. This 6 minute video will explain you in layman’s language that how the US Federal government is printing money out of thin air and how they call this entire money printing procedure as “Quantitative Easing?”?

In fact, the video also says that, Why the US Government buys the Treasury bonds from Goldman Sachs?

There are several eye opening things about Federal Government and its money printing activity in this small animation video.

This is really funny and many things are in this is very serious. So Watch it…!!!

Kaushik Basu: No need to Control Capital Inflow

Kaushik Basu: No Need to Control Capital Inflow

Chief Economic Advisor Kaushik Basu said to The Hindu that,

India had large capacity to handle these funds, but should keep all its options open in case the situation turns alarming.

“India already has a bunch of capital controls, so I am not personally in favour of stepping up on those and as one of the deputy governors of RBI has pointed out, the inflows that we are getting into the country are large but still not at a level that we are worried about,”

But Dr.Basu have not mentioned that, this Capital inflow (The newly printed money) will shrink the wealth of the average investors parked in PPF, RBI Bonds, Post-office savings schemes and other fixed income instruments by causing higher inflation.

This capital inflow may be good for the businesses but because of this newly printed money, the retirement of many people will become practically impossible.

The US Dollar has lost 93% of its Purchasing Power since 1918

[ImageSource: Watchingtheworld.org]

The US Dollar has lost its 93% of its purchasing power since 1918.

As I always say that, Saving Money is the age old financial advise which is no longer effective to ensure any kind of financial success. In fact, if today you follow this advise, You will surely meet the financial disaster and get poor.

I have a proof of my above statement. See the above diagram.

If you has saved and hold dollars since 1983 than up to now, it has lost its almost 93% of the purchasing power making you poor.

But well, if you had saved and invested this dollar in the S&P Index fund or even in gold than it had not only maintained its purchasing power but also multiplied by several folds up to now.

So this is the power of investing and that’s why I advise people that saving money is worthless now. I personally advise people to invest your money. Buy some kind of asset (Stocks, Bonds, gold, real estate, mutual funds, businesses, art….etc..) out of your money and keep that asset for years.

Asset can preserve your purchasing power by beating the inflation. So the Modern financial advise is,

Save & Invest your Money…!!!

China is afraid of Fed Bond Move

China is Afraid of Fed Bond Move

Recently, the US Government has announced US $ 600 Billion of QE2.

China says that, Fed Bond move may hurt other countries.

USA has planned to print literally US $ 600 Billion over the period of next year to save its economy. But now the governments and economists of all around the world are afraid that, USA Government’s this move will flood the world economy with excessive liquidity and when this newly printed money will enter into the emerging economies like India and China, it will artificially balloon the stocks, gold and real estate prices in these countries.

Not only this but because of weakened dollar, the exports of these emerging countries will become more costly and ultimately suffer.

Many people ask me that, “What all these means to us? We are the average investors who play safe and don’t invest in equities and real estate at all. We only invest in SAFE investments like FDs, Bonds, Pension plans, PPF and Post-office savings schemes.

Than what is the advantage of reading such kind of NEWS on your blog? We are not the economists so why we should worry about such things?”

Well, in simple words, all of the above NEWS to you means, your retirement is going to be extremely difficult and for many people next to impossible.

This is because the fixed income instruments that you think are safe are no longer safe. Because the rules of money have been changed and the US Government is printing billions and trillions of dollars out of thin air which is diluting the purchasing power of the existing money in the economy including the shrinkage of your money parked in the fixed income instruments.

Inflation will erode and shrink the purchasing power of your money parked in the fixed income instruments making your retirement practically impossible.

So it’s time to get financially well educated and learn how to invest in equities. This is because equity is no more a risky investment now. In my opinion, equity is the safest investment in the world. Safer than the Bank Fixed deposits, PPF accounts and other savings schemes.

If you want to retire peacefully now onwards, then you MUST need a knowledge of the Equity Investing. Otherwise, Retirement will be only dream for you…!!!

It’s Japan and Not the USA

It’s Japan and Not the USA…!!!

According to Moneylife,

One of the key factors for the global rally in equities, real estate, gold and commodities is the low US interest rates and the surge of global liquidity. At least that was the assumption among many smart Indian and foreign market players. So, with the rising US interest rates, there was a strong possibility that this global liquidity driven rally would come to a crashing end. This has not happened. Indeed, global markets have risen even more sharply with the rise in US interest rates. How did this happen? GaveKal, an independent economics research company based in New York and Hong Kong thinks it has the answer. According to its gripping new theory, the smart guys in the world have been monitoring the wrong source for global liquidity. Money to keep the asset prices going to newer heights is coming not from the US but Japan…..

Well, Yes. This is true. Actually Japan is printing billions and trillions of Yen out of thin air with almost NIL interest rates and the Japanese investors borrow this money from Japan government at lowest interest rates to buy the US Dollars at little bit higher interest rates and play in the emerging economies like India.

And this is the reason why stocks, gold, silver and real estate markets are rising like hell.

So What all these means to Average Investor?

You may ask me that, what’s all these have to do with me? I am the average investor who invests in safe instruments like FDs, Post-office savings schemes and PPF. Why Should I worry about equities, gold and real estate prices?

Well, the meaning of above news is that, wealth in your fixed income instruments is shrinking day by day because of the money printing activity of Japan and USA. Very soon, you won’t be able to retire on your fixed income instruments.

So start learning equity investing now and start investing in the equity for the long term if you really want to live peacefully after your retirement.

All of such kind of news shows that, the rules of money have been changed now. You can not be financially free with the old rules of money means save money, put it into the PPF/Bank FDs/Post-office savings schemes and retire peacefully.

Everythime, the new money is being printed in the world economy, it dilutes the purchasing power of your money parked in the Fixed income instruments.

So It’s time to increase your financial IQ.

Why Stocks, Gold & Real Estate Going Up and Up?

 

Why Stocks, Gold & Real Estate Going Up?

Many readers in the past few months have asked me that, if the USA is passing through the recession and there is global economic slow down than why the stocks, gold and real estate prices in India and all around the world are going up and up?

This is because a logical mind can’t understand this thing. I mean if there is a recession than ideally the stocks, gold and real estate should go down right? But here its totally reverse.

I mean have you ever think that why the asset prices are ballooning even though the world is in economic slow down and recession?

Well, it is because now the Central banks and Governments (USA, China & Japan) from all around the world have started printing new money out of thin air. When I am writing this article, literally billions and trillions of new money is being created in the economy and this newly printed money is artificially ballooning the asset prices by diluting the purchasing power of the existing money in the economy.

In November 2010, the US Government has planned to print more US $ 600 billion out of thin air by QE2. And basically this newly printed money is flowing into the emerging markets like India causing artificial inflating of the stock markets, gold and real estate.

What Average Investors Should Do Now?

It’s now time to become financially smart. As I have already told you that the asset is more valuable than the money. So buy assets out of your money. Don’t save your money but save and invest your money now.

Another advise I would like to give to the people that, Bank Fixed Deposits, PPF, Post-office savings schemes and other fixed income instruments are now worthless. This is because the newly printed money will shrink your wealth in the fixed income instruments by causing higher inflation. So learn to invest in equities.

Emerging Markets are Afraid of Fed QE2

Emerging Markets are afraid of Fed QE2

Finally the Federal Government has declared US $ 1 Trillion of QE2. (Well, Yes. It’s not just the US $ 600 Billion but it’s literally almost US $ 1 Trillion. Read Here)

Thus, literally $ 1 Trillion will be created more out of thin air in this world. And now the Emerging economies are worried. This is because this newly printed dollars will enter into the emerging markets and artificially balloon/inflate their equity and other asset markets.

Many emerging country leaders have shown fears.

According to the Economic Times,

HONG KONG MONETARY AUTHORITY CHAIRMAN NORMAN CHAN
"The launch of QE2 will definitely add pressure to the asset markets in the emerging markets, including Hong Kong.
"As far as Hong Kong is concerned, we would take measures that are specific to the housing markets and as you are aware, the government has introduced a package of measures in mid-August including land supply, sales practice and measures to dampen speculative activities in the markets. And as far as HKMA is concerned, we have introduced measures which tightened underwriting standards.
"We will continue to monitor the market condition and we'll introduce measures as appropriate."
PHILIPPINE CENTRAL BANK GOVERNOR AMANDO TETANGCO
"With yields in the U.S. expected to remain low for longer, the shift of funds to EMEs, including Philippines, may continue," Tetangco said in a mobile text message to reporters.
"The BSP will therefore remain vigilant in monitoring developments and gauging how effectively this Fed move will perk real U.S. growth, and therewith global inflation outlook."
MEXICO FINANCE MINISTER ERNESTO CORDERO
Authorities in Mexico and abroad need to monitor "the risk that this could generate more bubbles in asset markets."
"We will be very watchful in case we start to see a lot of this money getting channeled into the Mexican economy."
BRAZIL CENTRAL BANK PRESIDENT HENRIQUE MEIRELLES, IN
COMMENTS TO GLOBONEWS
"The result is a big expansion of liquidity, which is not being totally absorbed by the United States. This flows out onto other countries, including Brazil, which is growing. The consequence is an excessive liquidity of dollars which we are absorbing ... There was the decision of (raising Brazil's) IOF tax (on foreign purchases of bonds), and prudential measures aimed at preventing this from creating credit bubbles in the economy."
BRAZIL'S FOREIGN TRADE SECRETARY WELBER BARRAL
"(The Fed's decision) is cause for concern. They are policies that impoverish those around them and end up prompting retaliatory measures. And then you have this type of cancer which is protectionism, that spreads very fast."

Indian stock market will also balloon because of this newly printed money entering into the Indian capital markets and artificially raise all the asset prices.

QE2 will ultimately affect the economies of the entire world. What smart investors should do now? Well, they should stop saving their money in various fixed income instruments like Bank FDs, PPF, Post-office savings schemes and even EPFO. This is because Fixed income instruments are worthless now. When Governments and Central banks from all around the world are printing billions and trillions of money out of thin air like hell, it is advisable to invest your money in assets like stocks and gold rather than in fixed income instruments.

Now, the rules of money have been changed. Now, FDs, PPF and Post office savings schemes are no more safe. The safest investment is now Equity…!!!

QE2: A $ 600 Billion or a $ 1 Trillion?

QE2: A $ 600 Billion or a $ 1 Trillion Money Printing out of thin air?

Recently all the news papers and media are flooded with the news headline that, Federal government has declared the Quantitative Easing 2 of US $ 600 Billion. And under this QE2, the Fed reserve will buy US $ 75 Billion of treasury bonds every month until the middle of 2011 and by doing this, it will print literally US $ 600 Billion out of thin air.

But well, When I visited to the website – NewyorkFed.org,

I was really shocked. Basically according to the Ney York Fed’s statement, its not just the US $ 600 Billion of money printing. But actually it will be US $ 850-900 Billion means almost $ 1 Trillion of QE2.

The New York Fed plans to purchase securities worth $850 to $900 billion in the second round of quantitative easing.

It works like this: There will be an additional amount of purchases worth $600 billion (that's the headline number from the Fed today).

But there will also be a reinvestment of $250 to $300 billion from payments associated with other securities it already holds.

That makes QE2 feel a whole lot bigger, and closer to the top end $1 trillion number that was mentioned.

Thus, all the news paper headlines are basically misleading. Actually the Federal government is going to print much more money than we think. It’s another $ 1 Trillion money which will be created out of thin air and pushed it into the circulation.

Unfortunately, this newly printed money will cause financial disasters in the emerging economies like India, china, Japan and Hong Kong.

The effect of QE2 on Stocks, Gold and Silver

[Image Source: etfguide.com]

What will be the Effect of QE2 on Stocks, Gold and Silver around the World?

The US Federal reserve government has announced QE2 (Quantitative Easing 2) on Wednesday, 2nd November 2010. And according to this QE2, the US Government will print US $ 75 Billion every month over the year 2011 totaling US $ 600 Billion.

You can see in the above chart that, After QE1 in March 2009, the S&P gained by +79% up to now. So you can imagine the effect of QE2 in the future.

Tremendous amount of money is going to print out of thin air in the entire 2011 and this newly printed money will shoot up the price of gold, silver and stocks around the world.

In my opinion, its time to start investing in the stock market and precious metals like gold and silver because over the period of next year, all of these asset prices will go up and give excellent returns.

If you have never invested in stocks than this is the best time to start investing as the price of stocks from all around the world will go up. The interest rate in USA is just 0.25% means the big banks and large financial institutions can borrow money from the US Federal reserve at just 0.25% interest rate. This means that the entire world is now filled with the liquidity.

So its time to buy stocks, gold and silver…!!!

QE2 Announcement by Federal Reserve

[Image Source: etfguide.com]

QE2 Announcement by Federal government

Finally on 2nd November 2011, Wednesday, the federal government has announced QE2 (Quantitative Easing 2).

According to TheSteet.com,

The FOMC (Federal Open Market Committee) announcement that took place at 2:15 p.m eastern time Wednesday afternoon and revealed the Fed's decision to purchase up to $600 billion in long-term Treasuries until the end of June 2011, vs. the $500 billion that the market was expecting.

"The volatility may continue as there were reasons for profit taking, and sell stops in the market were based on sell the news," said George Gero Vice President, Global Futures, RBC Capital Markets.

Well, in simple words, from now onwards, to the end of 2011, Federal government will print US $ 75 Billion every month after month totaling US $ 600 Billion.

Thus, the US Federal Reserve will print more US $ 600 Billion over a period of time up to the end of 2011.

Ultimately, QE2 will drive all the asset prices (Stocks, Gold & Silver) to sky high in the year 2011.

US Monetary Base M3 is Decreasing

US Monetary base M3 is decreasing by 9.6% – Not a good sign

Monetary base (money supply) has 3 components – M1, M2 and M3. However, USA has stopped publishing its M3 data since several years now. But still from the level of M2, we can calculate M3.

Right now M3 is declining by 9.6% which means that the US Economy is going to see double dip recession which will be of deflationary type.

President Obama and Bernanke are planning to print more US $ 200-500 Billion out of thin air to save the US Economy and larger banks and corporations.

Why Indian Stock Market is Going Up and Up?

Why Indian Stock Market is Going Up and Up?

Sensex is very near to the 21,000 mark, We are again back on the levels of January 2008. The Businesses have not show much growth in their profits and balance sheets than why the Indian stock market is going up and up?

Have you ever think this thing?

Well, the answer of this question lies in the above chart. The above chart is of US Monetary base means the money supply. You can see that in past just 2 years the US monetary base has shoot up to above US $ 2 Trillion (It has doubled since 2008).

And all of this money is created/printed out of thin air only. And this newly printed money has entered into the emerging economies like India and China which is artificially inflating the Indian stock market.

If USA won’t stop printing more money than very soon we will see Sensex levels 25,000, 40,000 or even 100,000…!!!!

Yes, This may sound crazy to you. But it is true. Anytime the hyperinflation will come and erode the entire world economy. In fact, US Government is planning to print more billions and trillions of dollars out of thin air which is going to dilute the purchasing power of the existing money in the circulation and the stock market may shoot up more.

The key interest rates in USA are 0.25-0.50% only. So it means that any investor can borrow money from the US Government at this much low interest rate and invest it in the emerging markets to make more money.

So I advise people to keep a close watch on US Monetary policies and key interest rates. When the key US interest rates will hike, its time to exit from the Indian stock market.

US Monetary Base Explosion: Savers are Losers

US Monetary Base Explosion: Savers are Losers Now

MoneyFraction.com Says,

One of my biggest concerns is what this policy would do to the “savers” in our economy who, during their lives, have not overconsumed and thoughtfully have put away money for their retirement. Their capital accumulation is the fuel for our economy, but under this policy, the Fed forcefully drives the real rates of return for the savers (many who are retired or approaching retirement) to zero or negative. Many of the retirees in my district are facing a new financial crisis as the income on their savings has fallen as much as 70 percent over the past few years.

Since 2008, US Government has doubled its monetary base (Money Supply) by printing literally US $ 1.2 Trillion out of thin air (Also known as Quantitative Easing).

This newly printed money has diluted the purchasing power of the existing money in the economy.

And according to the US Federal Government, it can increase its money supply up to 400-700% (4-7 Times) from its 2008 level.

Let me tell you that in 2008, the US Monetary base was just US $ 800 Billion and its 4-5 times means around $ 3-5 Trillion…!!!!

Robert Kiyosaki said on Yahoo Finance that,

“Savers are Losers” now because the ruled of money have been changed. The people in the United States who live below their means and saved lots of money proved fool. Because they have saved something (Money), the value of which is going down year after year (Because of the inflation and bad monetary policies).

So the Modern Financial Advise is, “Save & Invest Your Money”.

Don’t keep your money with you but rather buy assets out of your money. This is because assets are more valuable than money. And this is the reason why people who own their own business and investments are more financially sound and richer than those who just own a job.

It’s time to get financially educated.

The Paper Money is Dying

The Paper Money is Dying

According to many economists, it is now “The Death of the Paper Money”.

This is because of the money printing activity of central banks and governments from all around the world, the paper money is losing its purchasing power day by day and becoming worthless.

In past 2 years only the US Government has increased its monetary base from US $ 800 Billion to literally above $ 2 Trillion. Of course,the asset prices shoot up but the value of money is going down.

Take the example of 1920s – The German hyperinflation scenario. The German government has increased its money supply and almost after 2 years, people lose faith on the currency and the currency became worthless.

You can see in the above picture that the German woman is using bank currency notes instead of coal for heating purpose. This is the end result of printing enormous money out of thin air.

If USA won’t absorb this liquidity soon than sooner or later people will lose faith on the US Dollars and the US Dollar will become worthless.

This is the era of fiat money means the money without any gold back up. Before 1971, the money was used to be backed by the gold which really used to keep inflation under control. But today the situation is different. After 1971, when the President Nixon removed the Gold Standard, the money stop being money and became currency – a piece of paper without any intrinsic activity.

In short, the rules of money have been changed and you need the future generation real financial knowledge to get rich and financially free. You can not become rich and financially free by using the old rules of money.

Download my FREE eBook: My Journey To Billionaire Club and learn what the rich people teach their kids about money that poor and middle class don’t?

You will learn 6 basic new rules of money by which the modern rich play the game of money and become rich and financially free. So don’t wait and download my eBook and shoot up your Financial IQ by several folds.

US Social Security is becoming Worthless Day by Day…!!!

US Social Security is becoming worthless day by day…!!!

The Expenses of the people rise even if Social Security Doesn’t – Wall Street Journal said in its article.

The people in the United States above the age of 65 years are mainly depending on their social security for their retirement. But well, the cost of living is increasing year after year because of the higher inflation in the United States and that’s why the retirement is becoming a dream for many people in their 50s.

Almost 90% of the people in their pre-retirement age group are fearing of running out of money during the time of their retirements.

This is because the cost of basic living is rising day by day and very soon for most of the people it will become next to impossible to retire on the social security schemes.

If you don’t want to become a victim of such kind of situation than don’t depend on your social security and 401(k) plan for your retirement. Rather than that build your own retirement corpus by yourself.

I personally advise young generations to start their own business as early as possible. This is because the business can give you financial stability after your retirement and also to your future generations.

I have seen lots of business owners who had worked very hard during their young life to build their own successful business and today their children are financially free than those who own a job.

Owning a job is the most stupid thing anyone can do. Never depend on your job. Rather than that depending on your business and investments for your financial future is much safer and secure than depending on the job income.

If you are in your pre-retirement age than also you can start your own business from your hard earned savings rather than putting that savings into the retirement funds.

Well, start your own business and hire people under your business to run it. Use other people’s time (Employees) to get richer rather than depending on the social security schemes.

Bernanke Liquidity Trap – What’s it?

Bernanke Liquidity Trap: What’s It?

Advisoryanalysts.com says,

"There is the possibility... that after the rate of interest has fallen to a certain level, liquidity preference is virtually absolute in the sense that almost everyone prefers cash to holding a debt at so low a rate of interest. In this event, the monetary authority would have lost effective control."

John Maynard Keynes, The General Theory

One of the many controversies regarding Keynesian economic theory centers around the idea of a "liquidity trap." Apart from suggesting the potential risk, Keynes himself did not focus much of his analysis on the idea, so much of what passes for debate is based on the ideas of economists other than Keynes, particularly Keynes' contemporary John Hicks. In the Hicksian interpretation of the liquidity trap, monetary policy transmits its effect on the real economy by way of interest rates. In that view, the loss of monetary control occurs because at some point, a further reduction of interest rates fails to stimulate additional demand for capital investment.

Many of you may not understand exactly what is it? But well, this is actually the side effect of printing excessive money (Known as Quantitative Easing in sophisticated language).

Usually during the time of the recession, the government increases its money supply by increasing bank reserves and reduce the interest rates so that investors and entrepreneurs borrow this money at low interest rates and invest in the economy to develop businesses and create new jobs thus reducing the unemployment rates.

But well, after certain level, the reduction in interest rates fail to stimulate the additional demand for this newly printed money and this is known as the liquidity trap.

The main aim behind reducing the interest rates is to motivate investors and entrepreneurs to borrow more money to create businesses and jobs in the economy.

Gold or US Bonds – Which is Bubble?

Gold or US Bonds: Which is Bubble?

What is the truth in the headlines? Many news headlines say that, Gold price is a Bubble. But many economists believe that, it is the bubble of the Bonds, the safe heaven.

In United States, people are convinced by the government that investing in Bank Fixed deposits and Treasury securities is a safe investment.

But well, see the above diagram of private and government debt. These so called safe investments are actually bubble. People who blindly invest in bank fixed deposits and government bonds in any part of the world are very soon going to be cheated.

This is because the US Government is going to weaken the dollar by several rounds of quantitative easings. President Bernanke also known as ‘Helicopter Ben’ has printed billions of dollars for the US citizens and thrown from the sky from the helicopter but right now this money is on the trees. I mean right now most of this newly printed money is in the bank reserves.

But when this money will enter into the circulation, it will cause hyperinflation and thus, your safe investments will shrink. Yup…Your Wealth in the bank fixed deposits and government bonds will be reduce in its purchasing power because of the higher inflation and that’s why people living on their pension plans and fixed income from safe investments will be the most affected people in the United States and Worldwide.

And this is the reason why you should start your own business as early as possible in your life. And yes, even if you are very near to your retirement, than also it is advisable to start your own business so that you can live peacefully after your retirement.

Currency Wars: Is Fed Really Printing Money?

Currency Wars: Is Fed Really Printing Money?

Recently, you must have heard in the newspapers and on the internet that the federal government is literally printing billions and trillions of dollars.

You must also have heard about the US – China Currency wars. Basically all the countries of the world are lowering the value of their currencies by increasing the bank reserves.

And USA also did the same thing which is known as Quantitative Easing (QE) in the sophisticated words. And this Quantitative Easing is the main reason behind shooting up the stock markets and gold price to sky high all around the world.

This is because now more money is in the bank reserves and the circulations and that’s why now more money is chasing the same amount of goods and services in the economy.

And that’s why the price of all the assets around the world is going to sky high. The only problem of such kind of quantitative easings is that, sooner or later the middle class from all around the world will be disappeared and in the next decade, there will be only two classes in the world – Rich & Poor.

And people who are currently living on the paychecks will become poor. And the people who own their own businesses and investments will become rich over the period of time.

How Much Will be Quantitative Easing 2 by Fed?

Children playing with stacks of worthless money in Germany

How Much Will be QE2 by Fed?

The Quantitative Easing 2 by the fed government can be US $ 30 Trillion or more.

The next set of bailouts could run $30 trillion (as I’ll explain in a bit) and that’s probably not the end of it because all the future government entitlements are well over $100 trillion. This is not only unaffordable, any attempt to make good on even a small portion of this is a fool’s errand. In addition to attempting an impossible task that is doomed to fail, we’re bailing out the wrong people!

See the above photograph. It is the picture of the children playing with the stacks of worthless money in Germany after WWI.

If the USA Won’t stop printing money, sooner or later all the dollars will be worthless because of the hyperinflation.
Right now, Zimbabwe is passing through the same phase.

Printing more money is not the solution of saving economy which is right now the US Government is doing. In November 2010, the US Government will go for QE2 which can markedly reduce the value of dollar by causing hyperinflation.

So it’s time to buy assets (Stocks, Gold, Real Estate, Businesses, Web Properties…etc..) out of your money rather than saving money in your bank accounts and Fixed deposits. This is because very soon the US Dollar is going to be worthless.