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Strategies & Market Trends : The coming US dollar crisis
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To: ggersh who wrote (29325)7/17/2010 1:00:13 PM
From: Real Man1 Recommendation  Read Replies (2) of 71407
 
Not likely. The Fed buying dollars through Caribbean
banks is an urban legend. -g-

The Fed did print, and 1.7 Trillion x 10 (typical banking
system multiplier) = 17 Trillion, a huge amount. They tripled
the monetary base, which should have much greater effect
than what FDR did in 1933. They also issued guarantees,
to the tune of 23 Trillion.

However, there is also the housing black hole, and that
amount did not produce the desired effect - the velocity
just dropped as banks kept all that cash in reserves.
The bubble was also bigger than in 1929. We won't come out
of this smoothly, that's for sure, and there will be
the second deadly blow of the financial crisis hurricane.
We are in the eye of it, just coming out. IMHO. Things will
fix themselves eventually after a great deal of pain. This
is not the first blow-up of Keynesian policies, but the
first one that is global -g-
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