November 9, 2010
Its on again. As the Fed has announced plans for QE2 (a second round of quantative easing – otherwise known as flooding the world with more money) the obvious is starting to happen.
Prices are rising. Fast.
Gold has passed US$1,400 per oz. Silver is up at US$26. Oil is approaching US$90 per barrel. And lots of other commodities are flying high.
Does the world really need this? Does the US really need this?
In the race to the bottom, the Federal Reserve seems to be working towards the complete destruction of the US dollar. Are they insane???
Or, perhaps the situation is just too far gone to really salvage. History will not judge George W. Bush kindly for many of the actions that created this.
As jobs are cut, government spending is pulled back, benefits are removed and more, the last thing that we all need is soaring prices because of the Federal printing presses. But that is what we are about to get.
Governments across Europe are trying to do their bit. Too little, too late perhaps. But they are trying. The UK, Ireland, Portugal and Spain amongst others are all staring down the barrel and trying to take the responsible action necessary.
It is a tough squeeze for most families – less money to spend and everything costs more. Meanwhile, the Fed virtually guarantees that hyperinflation is just around the corner, waiting for us all. That will be the back-breaker.
Depending upon which economist you are reading, hyperinflation is considered to start from about 20% per annum and up for an extended period of time. The folks over at Shadowstats seem to think that the US is almost there already.
It is difficult to imagine that this can end well for the Euro. The fact that Eurozone member are making progress is good. Will it be good enough?financialguy