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Friday, October 5, 2012

''The Only Way Out Is to Devalue''

a must read..............From Financial Sense
By Richard Russell

''Really, then how are we going to solve the debt and deficit problems?

It is not going to be solved. The temporary "solution" will be put off for as long as our pols can put it off. But how will they put it off? It will be put off in only one way — by devaluing the currency. And surprise, that's what they're doing now.

Let me give you an example. I took out a $10,000 GI insurance policy in 1945. The payments were $20 a month. That $20 a month was a great hardship for me in 1945. In the time since, the Fed has driven up inflation at the rate of 2% a year. 75 years have elapsed since I took out that policy. Today, paying that $20 a month would be a piece of cake for me. I could pay it easily.

And that shows how they're going to "handle" the debt. They'll do it by devaluing the dollar. Twenty years from now, there'll be so many dollars floating around that our national debt will look a lot easier to handle. By printing dollars by the billions or probably trillions, the US will render the national debt much easier to deal with.''

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