The Coming Depression
Fed Chairman Ben Bernanke, often referred to as “Helicopter Ben,” is a student of the Great Depression. He believes that, if necessary, pouring money from a helicopter will save the economy. So far, he’s dumped trillions on the world—and yet, the economy grows worse.
While he studied to become an expert on the Great Depression and earn his PhD, Chairman Bernanke determined that a tight monetary policy following the stock market crash of 1929 caused the depression. Hence, once he got the chance to apply his college studies to what is now shaping up to be the New Depression, he had his magic, academic formula ready. The formula was to print money and drop trillions on the economy, which he has done.
The problem is that this New Depression isn’t really new. It’s just the delayed result of the solutions for the last depression.
If you’ve read Conspiracy of the Rich: The 8 New Rules of Money, you know that many of the solutions to the Great Depression are the problems causing our New Depression. One example is Social Security, a wildly popular government program created in 1936. Medicare followed Social Security in the 1960s. When you look at some of the underlying problems causing the New Depression, it’s social programs taking care of millions of people wanting to be paid but no longer working.
Another problem causing the New Depression is government labor unions, workers who want to be paid more and do less. Many unions were formed during the era of the last Depression. I’m not against a person’s right to join a labor union. After all, my poor dad was the head of the teachers union in Hawaii. I’m simply referring to one of the challenges to fixing the debt-ridden, overly-expensive, inefficient economy. Simply said, labor unions, wages, and benefits, need to be reduced. They’re too high to be sustainable. The fight will not be pleasant. Many of the riots going on in Europe today are riots between unions and government. Labor unrest is also appearing in Japan and China. No doubt, it will appear in the US as well.
Another problem is jobs. One reason why the US emerged from the last depression was due to the fact that we had factories and the rest of the world’s factories were destroyed by the war. After World War II (WWII), Germany, France, England, Italy, and Japan had to rebuild their factories. Since the US wasn’t bombed and our factories were built up to fight the war, our factories were ready to supply the world. Once Americans returned from WWII, our soldiers had high-paying jobs waiting for them in our factories.
Today, the US factories have been shipped to China, the Philippines, Vietnam, Peru, Mexico, and other low-wage countries. How do we expect to solve unemployment when our factories are gone and our union wages and benefits are too high?
If you can solve those problems, you should run for President—or at least replace Fed Chairman Bernanke. Simply printing counterfeit money and dropping it on the economy won’t solve the New Depression. The world’s real problem isn’t a lack of capital. It’s a lack of capitalism and too much socialism. We have too much money and not enough production, which is why gold and taxes keep going up.
Rather than expect our government leaders to solve our financial problems, I have always recommended studying and increasing your financial education. Do yourself a favor and learn to take care of yourself.
Thank you for supporting COR.
Robert Kiyosaki
