...as today is the day that the Fed began monetizing the debt. Up until now, when someone bought a treasury note, they did so with existing fake dollars. In other words, no new money is created. As of now, that's out the window: the Fed will be buying treasuries and they will be creating new dollars to fund the purchases. Every dollar spent on this will be a newly created dollar. This is a broad expansion of the money supply, which generally means inflation. Serious inflation.
That could happen here, in the near future. Think Weimar Germany, or Mugabe's Zimbabwe. Keep in mind, though, that at this point this is just another desperate attempt to prop things up. The deflationary vacuum remain in charge, and nature abhors such a vacuum! We may end up retracing the steps Japan took over the last 15 years, in which no amount of tinkering could restart the economy, and in which a vast amount of newly created money also failed to ignite inflation. They still coast along in the doldrums, and probably will for many more years.
Methinks honest money and limited government could have been the solution to all this mischief, but I'm told that any such notions of legitimacy are outdated and unfashionable...
On War, Gold, and My Years in Congress
2 days ago