QE To Infinity & High Inflation: Now Certain

About two years ago, a friend and I exchanged brief words about the likelihood of QE3. He thought it certain NOT to happen; I thought it certain to happen — sooner or later, and in some form or other. I did not argue the point far, since, well, why bother? It is all speculation until it actually happens. Nevertheless, in my view it was, and is, their ONLY option. They must inflate. It is a bad thing to do, but they have no choice.

Anyhoo, here we are, a couple years down the line, and… ba-bing! It’s here! QE3. And not just any QE, but an OPEN-ENDED QE. No limits! Hence, QE to infinity, eventually, to manage those impossible deficits, debts and unfunded liabilities, well in excess of $100 trillion. QE to infinity — just like Jim “Santa” Sinclair (jsmineset.com) promised, years ago. Many of us knew that this would happen, but we were waiting for it to be bluntly articulated by the good Chairman. And finally, it was. Today.

This event ends, of course,  the old argument about whether or not QE3 is to be announced.  It will also mark the end, or at least the beginning of the end, of that interminable (and occasionally infernal) “inflation vs. deflation” debate. It’s inflation, full-bore, from here on out. There is no longer any doubt. Of course, there will be defaults and deleveraging-type events along the way, just as there have been up to now — housing crash, big bank failures, etc. That’s inevitable. And the deflationists will point to them (with dwindling credibility) as evidence of onrushing deflation. But the defaults will be papered-over, just as they have been, only now with increased intensity. There will be no general deflation with significant and enduring broad gains in dollar strength. The dollar may gain strength relative to a few select things, like real estate or high-ticket luxury goods. But in the main, it will be downhill for the dollar, starting now.

This is big news, as big as the meltdown of 2008. This day marks the beginning of the dollar end-game. Will it go Weimar or Zimbabwe, with complete destruction of the currency? I don’t know. It might. Or, maybe the dollar will survive in some greatly diminished role. It might be 5 or even 10 more years before we know, before it all unravels. We’ll see. But mark well this day, and position yourself accordingly, if you have not done so already. Commodities and precious metals will go TO THE MOON AND BEYOND. Some of them, like silver, well beyond.

Regarding the metals, remember: PHYSICAL ONLY. No paper. The paper is all heading toward zero, and a lot of it will get there. Paper “wealth” in all its forms is at great risk, and much will be stolen or confiscated even before it is drastically devalued, or destroyed. But with physical, your investment is guaranteed. Actually it was guaranteed even 12 years ago, but now doubly so. It is The Ultimate No-Brainer Investment, guaranteed to appreciate — probably a LOT — by Dr. Bernanke and the U.S. Federal Reserve. You have a 100% chance of doing well with it. Those are pretty good odds, eh?

As the Mogambo Guru says: “Wheeeeeee! This investing stuff is easy!”

………………

Notes:

1. The Bernank’s Soliloquy:

To QE3 or not to QE3, that is the question;
whether it be nobler to suffer the slings and arrows
of outrageous deflation,
or to take arms against a sea of defaults and by
monetizing, end them….

………………

Links, if needed:

http://www.tfmetalsreport.com/comment/211949
QE To Infinity
Thursday, September 13, 2012 at 1:23 pm
Long-rumored and oft-discussed, QE to infinity is finally a reality. Here are the Bernank Fedlines from ZH:
*FED TO KEEP POLICY STIMULATIVE FOR `CONSIDERABLE TIME’
*FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN’T IMPROVE
*FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END
*FED TO BUY $40B MBS MONTHLY, CONTINUE `OPERATION TWIST’
*FED TO BUY MBS, EXTENDS ZERO-RATE POLICY INTO 2015
Here’s the key take-way: This is it. This is open-ended, QE to infinity. Note the Fedline: FED WILL ADD TO PURCHASES IF (WHEN) LABOR MARKET DOESN’T IMPROVE

http://maxkeiser.com/2012/09/13/fed-decides-perpetually-bail-banks-new-qe-infinity/
Fed decides to perpetually bail out banks with new `QE to infinity.’  Posted on September 13, 2012

http://www.jsmineset.com/2012/09/13/hyperinflation-is-virtually-assured-john-williams/
Hyperinflation is Virtually Assured – John Williams
September 13, 2012, at 1:07 pm
Jim Sinclair’s Commentary
There could not a more important presentation to review
again today as QE is initiated. I assure you, to infinity now in USA and Euroland. I have taken a lot of heat on QE to infinity, but it was birthed today in the USA and a week ago in Euroland.


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