Wednesday, September 17, 2008

$85 Billion Bailout of AIG

AIG and The Fed has come to an agreement for the Fed to bailout AIG with $85 billion over 2 years. In exchange the government will become a 79.9% stakeholder in the company. With this deal the government has become the world's largest insurance lender and with it's bailout of Fannie and Freddie a few weeks back it is also the nation's largest mortgage lender. The bailout for Fannie and Freddie was about $200 billion total (that we know of at this point) and this bailout is $85 billion. Does anyone else wonder where the government is getting $285 billion to give to these companies, especially since we are already trillions in debt? Not to mention the fact that over the past two days they have injected over $100 billion dollars into the market bringing the total up to somewhere around $400 billion.

This does not solve the problem. When a central bank (the Fed) and the government devalue the dollar they set us up for future failure. As billions of dollars are continuously printed the dollar will decline. Our money has continuously lost value ever since we strayed from the Gold standard in the 1930's.

There are three short but excellent essays written by Dr. Ron Paul in the past few weeks. The articles discuss the importance of sound money and how sound money can bring peace(article 1), financial security (article 2), and how it can keep trade honest, government spending in check, and your retirement safe (article 3). Dr. Paul is a 20 year Congressman, an OB/GYN who has had a successful career as a physician, and he also has a degree in economics. Below are the links to the series of articles titled "In Government We Trust?"

In God We Trust? Part 1
In God We Trust? Part 2
In God We Trust? Part 3

Question the government, ask what this will do to your pocket, and ask if the government is going t bail you out when this senseless government spending finally hurts you.

Sound money is Golden,

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