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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: the navigator who wrote (18797)	3/18/2009 9:36:43 PM
From: bull_dozer	2 Recommendations Read Replies (3) \| Respond to of 71424

Caution On Quantitative Easing (QE) Ding. The BOE now has seen exactly what happens when you promise as a government to overpay for something - everyone hits your bid immediately! This is a form of crack that the government cannot afford to loose into the market - as soon as the buying pressure is removed rates will start to rise again, forcing yet another purchase. Ultimately The Fed winds up owning all of its own government's bonds, having destroyed the private capital market for sovereign debt (just as it has done for other securitized debt by threatening to overpay for those issues!) The difference is that if this happens for sovereign debt then deficit spending becomes impossible on an instant basis; this would in turn force a nearly 75% contraction of government spending. The outcome of this event would be the immediate destruction of Social Security, Medicare, half the military budget and half of all other government programs. PS: Bernanke knows this, which is why it hasn't happened yet. Let's hope he continues to remember it, because the destruction of our government is very, very un-funny, and this would likely precipitate exactly that in a "vast and fast" form. market-ticker.denninger.net