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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ggersh who wrote (87909)10/24/2007 5:42:21 PM
From: Mike Johnston  Read Replies (3) of 110194
 
It doesn't make a difference whether the Fed prints money and buys bonds or if the central banks of China, Japan or Brazil print money to buy US bonds, in the latter case inflation is simply spread to other countries.

I suspect that should China for example wish some day to dump the whole supply of their US treasuries, this transaction will be done with the Fed on the other side and interest rates will not rise, contrary to popular belief.

In this case China would transfer its US bond holdings to the Fed and receive freshly printed US dollars in exchange.

The Chinese will insist that this transaction is done in secret, in order to allow them to quietly dispose of the freshly printed dollars as soon as possible with minimal losses.

If one morning you wake up and find gold + 20% overnight this could be a clue that something like this has occurred.

Bottom line: US hyperinflation is baked in the cake, just a matter of when , not if.
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