No Way Out for the Federal Reserve

No Way out for the Federal Reserve

No Way out for the Federal Reserve

There is no way-out of here for the Federal Reserve now.

After so much talk of taper (“Taper-Talk”) the Fed finally didn’t follow-through. Why not? Because they cannot. That should be clear to anyone. There is not surprise here.

This is just talk. Schmoozing…Jive-talk…Rhetoric..Lies?

This is the clearest sign yet that Bernanke’s policies have failed. The rollback decision. He knows what’s coming and does not want to be around when it hits – and thus he is resigning (read – “get the hell out of Dodge!”) at end of year.

It is very, very, very simple to understand:

  • Interest rates MUST stay low
  • If not the amount of boring of US Government will bankrupt USA (it is already technically bankrupt)
  • So print money, buy bonds, keep rates low

There is a HUGE problem with this approach – They will either want to stop or be made to stop sometime:

  • They will be made to stop by other countries abandoning “incredible” US dollar (quite simply no longer sound money)
  • They will want to stop to try to restore credibility to the USD currency (not possible when printing 85 Billion USD per month – 1 Trillion USD per year)

When they stop (or the printing press is taken off them) the interest rates will rise.

The house of cards will fall.

© Copyright MMXIII RagingGoldenBull.com

Leave a Reply

Your email address will not be published.