If the stated purpose of the Fedʼs action is (1) to reduce unemployment, (2) to avert deflation, and (3) to end the recession, as the Fed and their pals in the lamestream media would lead us to believe, then it has already done a hell of an abysmal job. Isnʼt the very definition of insanity this: “Doing the same thing over and over again, and expecting a difference result?”
Something is very fishy here. More importantly, we note that the United States is (or will be very shortly) experiencing inflation, not deflation, and huge inflation at that.
Our foreign creditors basically have two choices as how to dispose of their excess dollars. They can use them to buy U.S. financial assets [priced in USD], such as bonds, stocks or real estate, or they can exchange them for other currencies or commodities [purposefully also priced in USD], such as gold or oil. If they choose the former, foreign central banks are off the hook, as those dollars find their way back to the U.S. economy without any additional money creation [in their countries]. However, as foreigners are increasingly choosing the latter, foreign central banks have been “forced” to print money like itʼs going out of style.
To put it in simplest laymanʼs terms what is happening: the United States is “pissing” on its currency, the USD, by hyper-inflating it through QE1 (Quantitative Easing) and QE2 and, soon to be, QE3, i.e., it is debasing or devaluing its currency by printing trillion of dollars out of thin air.
The United States government doesnʼt give a damn to what its citizens and the world think because the USD is currently the reserve currency of the world: (1) it has the only license in the world to freely print its currency from nothing, and the rest of the world will gladly accept the newly minted USD, and (2) because it doesnʼt plan on paying off its debts to countries such as China.
However, the rest of the world, including China, is catching on to this greatest Ponzi Scheme in history. Countries like China and Japan are slowing down their purchase and accumulation of U.S. Treasuries due to the indisputable fact that their holdings of U.S. government debts are losing value as the USD continues to drop.
The Fed is literally forced to print trillions of USD to buy up all of the unwanted U.S. debts in the coming months and years, as other nations stop buying U.S. Treasuries and start selling them back to the U.S. ever so gently and quietly.
What conclusions can we make from all of this?
For one thing, massive price inflation is coming very soon to the United States in terms of everyday retail prices such as in food and fuel. This will probably be felt by the average American within the next 6 to 9 months. Secondly, the currency wars among the export-driven nations will intensify as the USD keeps falling off the financial cliff. Thirdly, we are headed into Great Depression 2 just as assuredly as the
RMS Titanic headed straight to the bottom of the Atlantic Ocean. And last but not least, another major war, maybe even global in scale, may not be too far off in the distance, and it will be initiated by the United States or by one of its proxy allies in a “shock and awe” attempt to bypass and cover up the greatest economic and financial collapse in history.