I shared an article featuring Bill Fleckenstein’s thoughts on Marc Faber’s discussing “zero hour” – the point when monetary stimulus no longer spurs growth but merely causes inflation. Since then, inflation began rising until a “little” credit crisis derailed that streak.
Now that our “leaders” (lots of quotes in this article) have thrown billions of printed dollars at every problem everywhere, and not allowed anyone to fail (at great expense to the taxpayer and future taxpayers – great discussion on that at 4pm on CNBC today), the complete implosion of the US dollar is just a matter of time. I am not sure who is buying 30 YEAR BONDS at 2.5%, but they are – however this won’t last (would you lock in your money for 30 years at 2.5%?).
And now that Uncle Ben has rates at 0%, he is out of rate bullets. His only recourse then, is to print dollars and buy up every failing asset in the US. Anything you don’t want, he’ll buy. Folks this is what cheesy third world governments do. The set up for a strong rise in real assets, in commodities that is, has been put in place. Outside of a big expected hickup in 2009 (when stocks drop), real assets should rise in terms of US dollars.
At this point, most of our everyday items will cost more and more as the underlying materials (plastic, iron, copper, food, etc) will rise.
Chris Grande
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