No one in their right mind should believe that we've finally recovered from the “great recession”. Time after time we've seen the stock market rise and fall at the whims of the Federal Reserve, and their money printing parade known as “quantitative easing”. Everything is being propped up with funny money, and the only reason the dollar has recovered, is because every other economy on Earth is slightly worst than our own.
Now that the Fed has stopped QE3, it's only a matter of time before stocks begin to slide. When Bernanke was still in charge of the Fed, all it took was mentioning the possibility of ending QE, for stocks to plunge 1.4 percent. Now that QE3 is over, the only thing stabilizing the economy is the unspoken promise that if anything happens to the stock market, the Fed will come to the rescue with another round of quantitative easing.
While more QE from the Fed is all but guaranteed at this point, doing so may end up backfiring on their phony economy. Recently Peter Schiff has chimed in with some sobering thoughts on the matter. Any attempt to inject more money into the stock market, will only prove to investors that the economy is nothing but a house of cards.
The Federal Reserve will ultimately return to quantitative easing, which will send stocks reeling and gold soaring, asserts Peter Schiff, CEO of Euro Pacific Capital.
Now that the Fed has finished its third round of quantitative easing, it should leave well enough alone, he says. "The recession the Fed is fighting is the cure" for excesses in the financial system, Schiff told MarketWatch.
But he thinks that the Fed will implement QE4 at the first hint of weakness in the stock market or economy. And once investors realize stocks are overvalued, the dollar will plummet and gold will fly higher, he says.
"Gold prices will go ballistic, once people realize that the dollar is overvalued," Schiff said. He predicts the dollar will plunge 90 percent.While I doubt there will be such a dramatic plunge in the dollar anytime soon, another round QE is pretty much a foregone conclusion. Unfortunately it's not going to end well for them or for us. They have so much invested in the idea that we've finally recovered from the collapse of 2008, that any move to rescue the economy is going to break the facade of progress.
If the Feds were playing poker, this would be their “tell”. They're stuck between a rock and a hard place, and no matter what course of action they decide to take, stocks are going to sink, and save havens like gold are going to make a comeback.
Even if stocks don't fall, the Fed may still enact another round of QE. They are desperate to inflate the currency as much as they can, and are terrified of the dollar's recent recovery.
You have to remember that we're all in a race to the bottom. Every central bank on earth is trying to inflate their currency, because if the money becomes overvalued, then it won't be spent domestically. Goods will be cheaper overseas, so more money will be spent there, effectively propping up the economies of foreign nations at the expense of our own. This is what every government on earth knows and fears.
And they're dragging us all along for the ride. We're trapped on a high speed train with no brakes. There is no reversal from the path of paper money and inflation, because anyone who strays from that path and tries to strengthen their currency, will be eaten alive on the global marketplace. The nations of the world have only one choice. Keep inflating your currency into oblivion, and prepare yourself for the inevitable crash by quietly buying gold.
You might want to do the same.
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