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Strategies & Market Trends : The coming US dollar crisis
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To: carranza2 who wrote (25245)12/5/2009 10:44:48 PM
From: Real Man1 Recommendation  Read Replies (1) of 71456
 
A lot of people seem to be trapped into thinking that inflation
will not be a threat due to high level of indebtedness. That
includes Ben Bernanke, who is printing like there is no
tomorrow and is confident there will be no consequences.

After a far milder policy response to
Y2K internet bubble bust, oil went up 15-fold, and the economic
+ employment growth in the US remained tepid at best despite
inflating housing bubble.

The truth is, the blown up credit bubble has been offloaded
onto the government's balance sheet and is now being
monetized. So, the funding crisis
seems to be next. It is ugly, kind of a version of currency
crisis in slow motion, but this is how Keynesian systems die.
Examples (of simultaneous financial/banking and
funding/currency crises) in other countries are too plentiful
to mention.

It is stagflationary. Employment never returned to
Y2K levels during 2003-2007 bull market. Bernanke made it
clear he will keep printing and ZIRP forever until unemployment
improves. This will likely have very adverse consequences,
since all that money is now exiting US via ZIRP and creating
an economic boom elsewhere. Even without the carry trade things
would likely turn ugly.

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