"...the Fed's recent decision to boost its monetary stimulus
(a.k.a. "money printing," "quantitative easing," or simply "QE") by another $45 billion a month
to a combined $85 billion per month demonstrates an almost complete departure
from what a normal person might consider sensible.
...who in their right mind would want to hold the currency of a country
that is borrowing 46 cents (!) out of every dollar that it is spending
while its central bank monetizes 100% of that craziness?
...$85 billion pretty much covers all of the expected new [Government Debt] issuance going forward...
...The [financial system is] now well and truly broken...because [it is] no longer sending useful price signals.
...the [financial system is] now just a giant and rigged casino...
When your central bank badly misprices money and then bids up everything...,
nothing can be reasonably priced.
Risk is mispriced..., so we know the price of everything, but the value of nothing.
...QE4 is now going to act as both monetary and fiscal stimulus–
another $85 billion worth of [monthly] Fed accumulations...
...Getting unemployment down to 6.5% without inflation rising to a level higher than 2.5%
is not expected to happen until 2014 at the earliest.
...the Fed is now actively running both monetary and fiscal policy
because it will now be in the business of funding nearly 100%
of all the new government deficit spending in 2013.
And it is pumping a bit more than $1 trillion of hot, thin-air money into the economy as it does so.
...the Fed is most likely on track to increase its balance sheet by another $3-4 trillion.
...That's 300% to 400% more money created in the next year
than was created than during the entire 200 years following the signing of the Declaration of Independence.
...Since 2007, central banks have flooded the world financial system with more than $11 trillion.
Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated.
...The central bankers are, in effect, conducting a high-stakes experiment..."
...the central bankers have forged their own path, independent of voters and politicians...
...We are all collectively prisoner to whatever outcomes are in store.
The rather politely ignored truth right now, at least by most news outlets and politicians,
is that the world's central banks have wandered very far off the reservation
and are running an experiment that really has only two possible outcomes.
One is a return to what we all might call 'normal and stable' economic growth.
The second is the complete collapse of the fiat money and their attendant financial systems...
...The basic predicament here is that more and more money is being printed
...more money + the same amount of (or even less) hard assets = the perfect recipe for inflation.
So the rise of inflation will signal the beginning of the end of this slow-motion tragedy. "
Chris Martenson
Friday, December 14, 2012
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