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The Fed Just Gave You $20K, What Do You Do With It?

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  • Fri, Oct 09, 2009 - 09:06pm

    #1

    JAG

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    The Fed Just Gave You $20K, What Do You Do With It?

I have often observed that the dreaded inflation/deflation debate is often boiled down to one critical argument: 


  • The inflation camp believes that the Fed is all powerful and that it can create inflation (or deflation) at will.
  • The deflation camp believes that the Market is all powerful and that inflation and deflation are intrinsic to the marketplace.

Putting aside any judgments to the validity of each argument for now (or for forever for that matter) I want to discuss the inflationists’ “ace in the hole” that supports their argument: If the deflation becomes a severe enough problem, the government can always bailout the consumer with a “stimulus” check. of “x” amount of dollars. Dr. Martenson suggested this as a real possibility in his latest Martenson Report: Its Time To Prepare when he wrote the following:

Many observers raise the point that it may not be possible for the Fed to print fast enough during the next wave down, but I think they’ve got a few more tricks yet to try.  For now, they’ve been content to shovel money toward the usual suspects – their friends and revolving-door colleagues on Wall Street and big banks – but I have no doubt that they will pour money into the pockets of every man, woman, and child, if that’s what is needed. 

 

(emphasis mine)

Personally, I have never considered what I would do if this occurred, because I don’t believe that it could happen to any significant degree, but I’m frequently wrong so that it why I bring this topic up. 

 

So I think its prudent that we put the community brain-trust to work on this and figure out what is the best thing to do with a potential bailout check from the government. For discussion purposes, lets say that the amount of the check is $20,000 and that you have to spend it in one week’s time. Based on this scenario, I ask for your feedback on the following questions:


 

  1. What would you do with the money?
  2. Who would get the check and who wouldn’t, or would everybody get it? What are the ramifications if only a portion of the populace is entitled to this money?
  3. How would the money be distributed by the government? Logistically, how would the government give everyone a check?
  4. Would the government tax this money as income?
  5. What limitations would the government put on what could be purchased with this bailout money?
  6. If you couldn’t by gold or silver with the bailout money, what else would you buy or invest in?
  7. What do you think most people would buy with this money? And based on this answer, is there a particular corporation or industry that might significantly benefit from the velocity and/or flow of this bailout money?
  8. Do you think the general public would know in advanced about this personal bailout check or would it be a surprise event?
  9. Would the government specify that the bailout money could only be used to pay on existing personal debt? And if so, how are debt-free citizens going to benefit from this event?
  10. Would the public view this event as a good thing or a bad thing for our country?
  11. How would the rest of the world view this event and what would be the international ramifications of thier view point?
  12. Would a person be able to refuse to accept/spend the check? And if so, are there ramifications to this refusal?
  13. Is it possible that this consumer bailout fails to stimulate the economy? If so, how does it go wrong?

Thanks for your time and feedback….Jeff


  • Fri, Oct 09, 2009 - 09:11pm

    #2
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

Farmer Brown, lets say the US government sends you a check in Costa Rica as well.Wink

  • Sat, Oct 10, 2009 - 02:04pm

    #3
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    Re: The Fed Just Gave You $20K, What Do You Do With It?

90+ reads and not one reply to this thread…..hhhmmmmm. Perhaps my gut feeling on the likelihood of this happening is correct.

C’mon all you inflationists out there, someone walk me through this….

Can someone page Peter Schiff to this conversation pleaseSurprised

  • Sat, Oct 10, 2009 - 02:45pm

    #4
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

I would use it to make a move towards self sufficiencyhand tools, land, and food with a long shelf life.

  • Sat, Oct 10, 2009 - 03:01pm

    #5
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

If I could spend it on time before it becoming worthless, I’d buy tools, seeds, fertilizer, and a copy of “How to win friends and keep them from stealing your food.”  If I couldn’t spend it on time, I’d frame the bills for future “art” and “historical” value.

  • Sat, Oct 10, 2009 - 03:54pm

    #6
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

I would donate to a group like Campaign For Liberty to help create a nationwide educational seminar that teaches others the importance of our Founding Fathers principles and the logic of Austrian economics.

  • Sat, Oct 10, 2009 - 10:22pm

    #7
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

Wow if this happens we will all just be a ward of the Govt….more of a Welfare state than we already are. This would certainly send the signal that all regular channels are failing. In keeping with the true tradition of the welfare state the money would only be handed out to the less responsible not to the people that have lived below their means & saved money with no debt….so I know I will not receive anything at all.

As have been proven by the past it has paid to be irresponsible so you “receive”.

If I was one to receive this 20k I would 1st pay off debt but this will not be allowed IMHO even though Turbo Timmy says Americans need to save more…..go figure LOL. My guess is they would force more Clunkernomics on us with this money so spending it on something real that will be needed in ones future of learning to live with less would be wise IMHO. We could always go for “broke” with the money & make a big party with it at Jaq’s place to live it up one last time LOL.

The best thing we could do with it (if allowed) is to turn the money back on Washington to use it to lobby for “SANE” economics & let Madoff have some of his friends to play with……the banksters.

Maybe there is such a thing as a jobless recovery if you can just digitize money & have it show up in people’s accounts with nothing but an I need I want behind it to back it up LOL. How could they ever sell our debt to other countries if they see the Govt  this desperate? It would be the end of the game once they have to monetize 100% of our debt IMHO.

  • Sat, Oct 10, 2009 - 10:34pm

    #8
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

[quote=idoctor]

The best thing we could do with it (if allowed) is to turn the money back on Washington to use it to lobby for “SANE” economics & let Madoff have some of his friends to play with……the banksters.

[/quote]

LOL idoctor!  I hadn’t thought of that. What a great idea!  

The more I think about this, the more I believe that the government could never pull it off without major nation-ending chaos resulting. If it does happen, I say lets get out of the country and party at Farmer Brown’s farm in Costa Rica!

  • Sun, Oct 11, 2009 - 01:11am

    #9
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

JAG

Well, with the first stimulus check from Bush 4-5 years ago, my wife and I bought a TV.  We’re a little wiser now.  From what I’ve heard on Zimbabwe and from a narrative on the Roman Empire when it ran into its monetary crisis, the stimulus checks will be going to the military, police officers, politicians, etc.  or if we get a $20,000 stimulus check, then those just listed above will get a $100,000 check.  The Fed first and foremost needs the people that will protect them to be well fed and happy.

A $20,000 stimulus check would imply that the country would be in dire straights.  I suspect I would be running quickly  to the market to obtain food and other necessities for staying alive. 

Brian

  • Sun, Oct 11, 2009 - 02:16am

    #10
    Peak Prosperity Admin

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    Re: The Fed Just Gave You $20K, What Do You Do With It?

Jeff,

When I read your proposal, unlike the respondents so far, very specific ideas sprung to mind.  I would have my Amish friends build a small barn for me, put up enough fencing for a small pasture, buy a couple beef calves, a milk cow and chickens, get a couple Welsh Cobs or Norwegian Fjords (small draft horses) buy some equipment to expand my garden space by horse power (literal) and buy enough feed and hay to get me through a couple years.  I could supplement with my own money to finish the project if the $20 Gs run out.

Or, I would acquire enough alternative energy equipment to go off grid.  But, more than likely I would just continue on my current efforts to build my own at relatively lower cost.

Would it be taxed?  Of course.

What corporation or industry would benefit?  The Amish, although I don’t think they fit either category, and local farmers.

With only a few exceptions, most people wouldn’t concern themselves with whether it is good for the country, they would view it a positive for themselves.  Other countries would view it as a sure sign of national insanity and start baling out of the USD.

Would people be able to refuse it?  Yes, we all have the right and privilege to donate money to the gov’t, even if they give it to us first.

If you’re talking about $20 Gs per person, that comes out to about $4.6 trillion.  I think the dollar would collapse overnight.  So. forget everything I wrote before.Wink

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