Meet the new boss, same as the old boss

Ready for change? The fed has now pledged an amount of money equal to half the US GDP, that basically means the value of our dollar was just cut by a third. It works like this, the value of our currency is linked to our ability to produce and consume in our economy, last year that number was right at $14 trillion, so if the Fed prints up $7.4 trillion new dollars it means there will be about $21 trillion in currency for an economy of 14 trillion (it's hard to really know this number since the fed stopped reporting on the M3 money supply in 2006).

That would be like if we had 1000 ounces of gold, each with a certificate giving the bearer of that certificate the right to an ounce of gold. Then if we decided to just print up 500 more certificates without the gold to back it for a total of 1500 certificates backed by 1000 ounces of gold. It wouldn't give us more spending power, it would just make each certficate worth less gold, it's really pretty simple division. So get ready for some change, because that is what our government via the Federal Reserve (which is not our government) is doing:

Sounds like change:

Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama's choice to be Treasury Secretary.

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

If credit is the 'lifeblood' of our economy (not real money), and it's dried up, that sounds like a problem. The new Treasury Secretary is the guy currently at the federal reserve bank running all the new spending programs. He's in charge of the people who believe the solution to the problem is to find more credit, instead of finding sound money.

After all the hubub about change I guess we will get it afterall, except it will be the change that comes with ignoring basic principles about money that have been with us as humans for thousands of years. This change includes inflation, price increases, loss of liberty, the disintigration of infrastructure... Hopefully we'll come to our senses.