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It's sitting on the Fed's balance sheet waiting patiently for the right moment.
There is still a very large amount of excess reserves created by QE sitting in banks, just waiting to be loaned out. But not enough for the USD to go hyper with. This is the resultant weakness and inefficiency of QE after all. Not enough viable borrowers. Some intents of QE were to promote lending, more commerce and some inflation.
The case for hyperinflation was predicated on the FED and QE, not specifically both parties inability to control their spending. Libertarians started pounding the table about FED policy and hyperinflation 5 years ago.
There is still a very large amount of excess reserves created by QE sitting in banks, just waiting to be loaned out. But not enough for the USD to go hyper with. This is the resultant weakness and inefficiency of QE after all. Not enough viable borrowers. Some intents of QE were to promote lending, more commerce and some inflation.
The credit markets are unfrozen. The US taxpayer is receiving interest on the bonds that the FED holds (which also have value and can be redeemed later). It may not have been as efficient as originally envisioned, but it did accomplish what was intended.
It's coming....I just don't know when. How will the Federal Govt payback the debt? Someday institutions will require much higher rates before loaning them money, and some will flat want their money returned. But how do you repay that money if there's no one loaning you the money to do it. Answer: if you're a private company, you declare bankruptcy; if you're a government and have a printing press....you print money until you run out of ink. In effect you're repaying money with cheaper money. This is hyperinflationary.
The multi-trillion dollar question is when does this happen? 5 years? 15 years? 50 years? 100 years? I have no idea....except that it will happen----mathematically and economically it has to. How much does federal government have to borrow annually to fund the deficit? Multiply that total debt figure by 1.04% (roughly the rate of 30 yr. T-bond)-----by the number of years in question---say 20 years---and you obviously get a much bigger number----question is will pension funds, China, Middle East, university endowments, and hedge funds loan that money at a "reasonable" interest rate, or will they demand repayment?
The really interesting thing---the above scenario is going to happen to Europe and Japan well before it hits USA. What kind of effect will that have on US stock and bond markets??? Fascinating stuff.
When are you guys going to figure out that the national "debt" is as big a scam as global warming?
You know what the debt is? It's the super rich moving their money from one place to another and charging us peasants for the freight. That's it in a nutshell.
How else can they get you to vote for someone who will cut your benefits other than to create a scenario that makes you think you have to?
The case for hyperinflation was predicated on the FED and QE, not specifically both parties inability to control their spending. Libertarians started pounding the table about FED policy and hyperinflation 5 years ago.
Would YOU care to make a prediction?
The USD might hyperinflate if the US loses a major war and its country, or is physically decimated by an asteroid hit.
But, I thought we were talking about monetary policy, not Black Swan events.
I see the 2010 predictions of hyperinflation (from QE) as illustrative that predictions of long term economic results are virtually impossible. Too many variables and unexpected events.
The credit markets are unfrozen. The US taxpayer is receiving interest on the bonds that the FED holds (which also have value and can be redeemed later). It may not have been as efficient as originally envisioned, but it did accomplish what was intended.
We've are in a de facto perpetuity. The math is pretty simple. Algebra says it will have to give. What's your guess:
Bank Holiday? Currency Reset? Inflation? Lower Standard of Living?
We've are in a de facto perpetuity. The math is pretty simple. Algebra says it will have to give. What's your guess:
Bank Holiday? Currency Reset? Inflation? Lower Standard of Living?
I really do not have a guess. I only know that theories of impending economic doom have been around a very long time.
A lower standard of living is already upon us, but that is due to globalization, an inevitable force that we either work with or it will leave us behind. I remain a cautious optimist. It has worked for me relentlessly for 30 years.
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