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Central Missouri | Djm a cupla thoughts per your last post. You asked how will the banks pay back the TARP? I have asked myself many times how the too big to fails will keep from failing. (They are gonna let the not too big to fails fail.) Here is the conclusion I have come to (last nights action in the dollar re-confirms it too me). The too big to fails will be allowed to continue to borrow money from the fed at near zero percent interest and they will invest it in stocks and commodities. This is the only course of action the fed has or the banks implode. The dollar will be devalued much more. The fed has to there is no other way. They are hoping the dollar devalue spurs exports and we grow out of this but it isn't gonna happen as consumers have changed their spending habits. Soo they devalue the dollar by half which effectively reduces the deficit by half. It also reduces the savings of Americans and anyone else holding dollars by half. This is one major reason for the increase in price in gold/silver. PM's aren't an inflation hedge they are defence against bad govt policy, sometimes that bad policy is inflation, this time the bad policy is fed budget deficit and devalue of the dollar. Soo what will this bring us. Here is what I believe from my info at this time
1. Dollar devalue won't work to put people back to work
2. PM's are going to big prices over next 5 years. Gold at 5k won't surprise me.
3. We will see grains at big prices sometime in next 5 years
4. Dollar will eventually get below 50
5. That will put oil north of a big #
6. It is unstated U.S. govt policy to devalue the dollar ( it is the only way out)
7. The only thing that will fix the problem is a major dislocation in our financial markets. One that forces change
8. In the end the people will either lose liberty or retake the republic.
9. btw imo there will be another stimulus bill. I suspect next spring as that will buy votes for the 2010 elections
10. There is a growing chance that hyper-inflation will occur because the alcohol (money printing) hasn't been taken from the alcoholic (the legislative and executive branches)
11. oh btw, your taxes are goin up dramatically over the next 5 years. Both property, income and new ones such as the health care tax.
12. Only a revolution will stop what is in place. Lets hope it is peaceful
13. Hyper-inflation will kick-off an unpeaceful revolt because people won't be able to pay for their necessities with their unemployment checks.
Just some thoughts. All based on the premise that the only course of action the fed has is to print and it isn't gonna work with the adde3d consequence that it may take us to hyper-inflation. There is a fifference between hyper-inflation and the good old inflation of the late 70's early 80's.
http://en.wikipedia.org/wiki/Hyperinflation | |
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General thoughts into year's end and my thoughts
