Gas and Elections

Ever notice how gas prices always drop before a presidential election? I've noticed the last three times. They are kept so high for so long that any reduction gives people a false feeling of relief, even though I remember being pissed 3 years ago when prices went above $3.20.

Inflation is "a decline in the real value of money.[2] When the general level of prices rises, each unit of currency buys fewer goods and services... Inflation also shifts income from those on fixed incomes to those with variable incomes." (Wikipedia)

The value of your assets can be eroded by inflation. Inflation has also been described as a hidden TAX. The fancy word for this is fiscal drag, "the process where tax thresholds are either not adjusted for inflation, or fail to keep pace with earnings growth, causing in either case an automatic rise in tax revenues."

"When the expenses of the U.S. Government exceed the revenue collected, it issues new debt to cover the deficit. This debt typically takes the form of new issues of government bonds which are sold on the open market. However, the debt can also be monetized by which the Federal Reserve creates an entry on its books to credit the US Government for an amount equal to the dollar amount of the bonds the Federal Reserve is acquiring. The money created in this process not only includes the new dollars that came into existence just to purchase the bonds, but much more because this new money is now sitting in the form of checkbook money at the Federal Reserve. Under the scheme of Fractional Reserve Banking this new checkbook money is treated as an asset to lend against. Economists estimate the expansion of the money supply as being many times the amount of the initial money created with the exact amount being a function of what percentage of deposits banks must set aside as "reserves".[15][16]

"The ultimate consequence of monetizing U.S. debt is that it expands the money supply which will tend to dilute the value of dollars already in circulation. Thus, expanding the pool of money puts downward pressure on the dollar, downward pressure on short-term interest rates (the banks have more to lend) and upward pressure on inflation. Typically this causes an inflationary boom that ends in a deflationary bust to complete the business cycle." (Wikipedia: United States public debt, The mechanics of U.S. Government debt

Did you get that? The government makes a "checkbook entry." They create money. They do this when thay need/want to. Introducing more dollars, or currency, into an economy causes inflation. Wh pay more for the same products and services.

But that's what happens when inflation skyrockets under republican presidents who spend out of control...

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