A post today from zerohedge gives a preview of the endgame of QE1, QE2 and finally QEternity put forth by the Fed as an effort to stimulate growth. Apparently, even the Fed doesn't know what they are doing, by their own admission.
Here we are, $16 trillion in the hole, and the Fed is putting the pedal to the metal to the tune of $40 billion per month. Print a few trillion here, a few trillion there and soon you are talking about "real money", right?
I guess it is fortunate that the US Dollar is still the world's reserve currency, with oil and a whole host of other commodities being priced in dollars, so the demand for our fiat greenback is still strong. But boys and girls, let me assure you that as soon as that game changes, we are well and truly hosed. Demand for dollars will dry up in an instant and suddenly, there will be more dollars chasing fewer goods and services overnight. And there are some hints that the game is changing already, with the BRIC countries giving each other access to local currencies within their central banks.
So where does this leave us? By the Fed's own model analysis, if their zero-bound interest policy continues for 8 or 9 consecutive quarters, hyperinflation is all but inevitable. Since the Fed had committed publicly to this policy through at least mid-2015, it seems a deliberate attempt to destroy the USD. Add to that the international movements of currency outside of the current USD reserve and you have a recipe for greater disaster. I do and truly get the sense that the Fed is busy with the deck chairs on the Titanic, hoping that the iceberg we have hit is just a mirage.
Holding physical commodities is looking like a better idea as each day passes. Be careful out there.
