By engaging in quantitative easing (the printing of money) on a scale never before witnessed or imagined by the inhabitants of Planet Earth, the Federal Reserve is fast approaching the tipping point.
With QE2, the buying of U.S. Treasury bonds from the Treasury Department (a Ponzi scheme of epic proportions) scheduled to end by June 30th, what is the Federal Reserve going to do?
The move up in stocks, bonds and commodities is almost entirely due to the counterfeiting of the Fed. All that confetti (paper currency) has to go somewhere. But since the "recovery" is not real, should Big Ben (Bernanke) decide to pull the plug on QE2, it will be time to put on your helmets and crawl into your bunkers. Stocks and bonds will plunge along with what's left of the economy.
If, on the other hand, should the Federal Reserve cave and give us QE3, 4, 5, 6 etc., then the Cartel will have lost all credibility when it comes to fulfilling its mandate: price stability and full employment. Inflation will get far more virulent than it already is. Our purchasing power will all but disappear.
My guess is that they will SAY that the end of QE2 is upon us while continuing to print monopoly money at a rate greater than the speed of light. They have no choice, really. With the debt closing in on its own tipping point, it's inflate or die for the Fed.
March 28, 2011
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