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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Real Man who wrote (77934)1/21/2007 8:22:05 PM
From: Mike Johnston  Read Replies (2) of 110194
 
Ultimately it will be the dollar
that will crash, leading the crash in bonds and stocks,
and the myriad of leveraged derivatives. For a credit system
backed by the full trust in the Fed that creates the paper
dollars, this is the only way.

In the end, the only way the Fed can intervene in the markets is by creating new dollars. The game will be up, when those new dollars will not be accepted as a medium of exchange and a store of value. At that point the Fed will be made irrelevant and the long , painful adjustment process will begin. The product of the Fed's printing press will only be good for burning in stoves for heat, if anything.

When you abuse it, you lose it.

The longer the Fed abuses its power, the closer the day they will lose it.
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