For four years the FOMC has been printing money to keep interest rates low in order to stimulate the economy. For just as long investors have been hand-wringing over the long-term dire implications of such quantitative easing. The basic idea is that the Fed will eventually stop printing and all assets would tumble, priced as they are relative to risk-free money. With the Bank of Japan, Europe, China and seemingly every other major economy now doing variants on this form of stimulus, the “race to debase” currency has become a phenomenon.
When the nations group together (looking for a way out), they will find a scapegoat in the Dollar. It will be for these reasons why they will opt, hoping against all hope, to replace the dollar as the world’s exchange currency. It will be in the false hope of averting a collapse of their own. They will not escape…
The question remains as to just how long this will take. This winter? This summer? This spring? One thing is for sure. It will not be the American citizen, alone, who will suffer.
From Gains, Pains, & Capital ~ February 20, 2013
“We’re literally at most a few months, and very likely just a few weeks from Europe’s banks imploding, potentially taking down the financial system with them.”