By: John Fisher
The Federal Reserve and Ben “Helicopter” Bernanke (now his nickname makes real sense) have launched another massive round of Quantitative Easing (aka money printing), being referred to as ‘QE2’. Between $600B – $800B worth depending on who you ask.
QE1 was supposedly a single, one-off “stimulus” for the good of our – and supposedly the world’s – financial system. Now if a little QE1 is good, (albeit with negligible results to show), then another round would be even better – right??
As one commentator put it, “The junkie has graduated to another level, from that of being merely a chronic debtor, unable to live within its means and sponging off the rest of the world, to selling its own future down the river in order to maintain its voracious consumption habits in the present.”
The Wall Street Journal Tuesday, November 9th front page article read “Fed Global Backlash Grows – China and Russia join Germany in Scolding; Obama defends move as pro-growth.” Who’s kidding who? We have to print money because we can’t find enough people/countries to buy our debt – PERIOD!
If the United States doesn’t receive $4B in NEW treasury purchases every day – 365 days a year – we can’t make our interest payments on our bonds and we default! Unless of course, we print more of our own money to buy our own debt, that no one else wants, and then give it an esoteric moniker like “Quantitative Easing”. It’s that simple! It’s that ridiculous!
So what is the rest of the world to do? Take it lying down? Hardly. Our QE policies are forcing other countries to do the exact same thing. They now have to manipulate their currencies downward to remain competitive in the global marketplace.
All Things Considered – John’s Commentary:
So where does all this “fresh” money go? To commodities and other tangible items – especially gold and silver – anything which provides a buttress against the inflation, even hyperinflation that will occur.
Action to take: Continue to buy gold and silver in modest amounts in regular intervals. That is your very best bet. DO NOT WAIT AND TRY TO TIME THE PULLBACKS! This market will run away from such individuals. If we get a pullback, then buy a little more.
Decide if you believe the market is going higher or not. Don’t get fancy – simply dollar cost average.
What to buy: The premiums on silver are very, very low. Four percent or less in quantity with free shipping and insurance. Stick with the bread and butter – 90% silver, 1 oz. generic silver rounds and 100 oz bars. Gold – Maple Leafs and Krugerrands are currently very reasonable. US Arts Medallions and Austrian 100 Coronas sell at only 3.5% over spot delivered.
Quote of the day: “Permit me to issue and control the money of a nation, and I care not who makes its laws.” – Amschel Mayer Rothschild, 1838
