Economy Carberator

A good carberator regulates fuel into an engine. The Fed Chairman, the economy carberator regulates money supply into the national economic engine. You and I are the economy carberator and regulate cash flow into the engine we call our households. We each are carberators at our different levels.

A good carberator keeps the engine running smoothly and efficiently. When more power is demanded, more fuel must be supplied. Effectively, the carberator manages supply and demand for the engine. When supply and demand get out of whack, things get messy.

If the national economy wants to run at 100 miles per hour, but there's only enough fuel (money supply) to go 55, then there's a problem. The Fed Chairman has a decision to make. He could do the right thing and tell the economy it must only go 55 to be safe and operate smoothly, or he could appease the demands of the economy and give it more fuel. Unfortunately the extra fuel is borrowed and must be payed back with interest. This means a time will come when we won't even be able to go 55 anymore while we catch back up.

Recessions (sometimes depressions) are the time periods when we're catching back up. When we allow our politicians to continually spend more than our country makes, we must know that there will come a time when the piper must be paid. This is why it seems that every decade includes a recession. We should demand our politicians spend our Country's money with the same principles we must when we run our individual households.

Currently when our nation needs more money to pay the bills, we simply PRINT MORE! If only we could do that at home.

When money supply increases, inflation increases. It only makes sense that the more dollars are printed, the less each existing dollar is worth. When George Washington suffered through the winter because he couldn't afford supplies for his troops, he blamed the local merchants for charging too much. What he failed to realize was the government printed so much money to fund the war effort that each of the existing dollars just didn't go very far any more. The merchants were as much the victim as George and his troops. The same thing happened to confederate money in the civil war. Money supply over the last year (measured by M3) increased over 15%. Someone must be printing a lot of money to pay their bills!

As a result, inflation has increased the last couple quarters more than it has in years. Our financial system is in crisis due to excess greed. The dollar is in crisis due to excess greed. If our economy's carberator doesn't get fixed soon we will have a very tough stretch ahead. Probably a deep recession if not depression and rampant inflation to boot.

You can help your fuel efficiency by visiting my 401k investment tool site at 401k Plan Facts.