Stimulus Programs Equal Economic Heroin

financial heroin, stimulus, economic drugsQ: What do stimulus programs have in common with heroin?

A: Stimulating the economy by printing cash is kind of like stimulating the brain by taking heroin. Sure, the user feels great, getting high for a brief period of time. The problem is that, unless the user keeps pumping more heroin into his system, he crashes and goes into withdrawal. Then again, if he keeps pumping heroin into his system, eventually the body shuts down completely; that isn’t a solution.

The price of gold and silver is a direct reflection of how much currency is being printed and how much money the federal government is spending. Thus, the question of what gold and silver are going to do over the next few years is fairly simple to answer. The price of gold and silver will likely move higher if Congress continues massive deficit spending and the Federal Reserve continues to print money through its stimulus programs.

Since 2008 alone, the Federal Reserve has printed several trillion dollars out of thin air. The Federal Reserve prints this currency to try to stimulate the economy. In fairness, this sometimes works…at least for a little while. But the Fed can’t keep pumping cash into the system indefinitely like heroin; eventually the overdose of cash will shut down the system entirely. When the stimulus stops, the economic withdrawal will be a massive recession and deep deflationary depression.

This market crash is inevitable. The Federal Reserve has simply supplied too much “heroin” in the form of cheap money with artificially low interest rates. The crash is going to create a lot of chaos, but ultimately, gold and silver will benefit from the crash, because they are real money.