When Obama defended the Fed’s money printing on his recent trip abroad, The One used the same language he used to describe his own efforts — to get the economy moving again.
If that isn’t a clear signal that The One and Paul Krugman got their stimulus wish without having to go through Congress, I do not know what is.
The GOP is beginning to clue into the end-around, but the distractions of 84 GOP freshman House members arriving in town and the earmark battle has muted the GOP’s attention.
But this money printing scheme of the Federal Reserve essentially will accomplish the goals that Obama wanted to with his second stimulus — with him being given the opportunity to claim he is not behind the hundreds of billions in new money printing.
The Feds actions to devalue the dollar have already had an inflationary impact on both the stock market and the commodities market.
This would explain how gold, oil and the stock market are all going up at the same time.
But there will be a crash from the Fed inspired bubbles, there always are, and it will not be pretty.
Also, the Fed’s actions have already initiated a currency war, hopefully one that is a cold-currency war, but a currency war nonetheless.
If you have the time, dear reader, watch the interview below. You do not have to watch the entire 25 minutes, just skip to minute 9 and 15 seconds and watch about three minutes to minute 12 and 35 seconds. Then skip to minute 25 and 15 seconds and watch to the end.
Stand by, the Fed bubble burst is over the horizon and it will not be pretty. After it bursts, those holding cash will be holding all the cards. And holding onto cash is exactly what large companies are doing, and exactly what the Fed does not want people to do — they are exacting a real price for holding onto cash. The Fed’s real purpose in devaluing the currency is to get people holding cash to spend it.
What the Fed is also doing, and the recent numbers bear this out, is causing investors to move their money into other markets and other currencies, so right now, more money is leaving the U.S. for foreign investments than is being invested by foreigners in the U.S.
And the big cash that’s here is staying as cash, in large part, waiting for the money-printing bubble to burst and then play white knight, absorbing and “saving” the big pieces of the best of the post-bubble rubble.
The problem is that the Fed is playing with rubble inducing events, and the earthquake may be much larger than the Fed thinks.
This is what Obama’s and the Fed’s push for stimulus will bring.
Did I mention the smart money is leaving the country? Oh, yeah, I did.