The Fed’s Gone “ALL IN”… Here’s What’s to Come

Friday, November 5, 2010
By Paul Martin

by Phoenix Capital Research

Well, it’s official, Ben Bernanke has officially gone “all in” regarding currency devaluation in the name of pumping the stock market. I have to admit, even though I knew this was going to happen, I’m still in shock. After all, it’s not every day that you see a superpower collapse and lose its reserve currency status courtesy of a deranged mad man.

Regardless of your feelings on the matter, these are the cards the Fed has dealt us, so rather than devote space to critiquing our insane and corrupt Fed Chairman, I thought it better to devote today’s article to detailing what is to come as a result of the Fed’s policies.

1) QE 1 Failed, so Will QE 2= The Fed Doesn’t Have a Clue

This is the most obvious, but most commentators seem to be missing it. We were all sold on QE 1 as being an emergency measure meant to keep the financial world afloat. Now we find out that the Fed considers this formerly emergency measure to be one of its normal tools (it’s not yet been a year since QE 1 ended and we’ve already got QE lite and QE 2).

In plain terms, the Fed’s decision to implement QE 2 proves not only that QE 1 FAILED but that the Fed doesn’t really have a clue on how to fix the financial system. Bernanke is literally making it up as he goes, which is truly horrifying if you consider the implications of this.

In light of this, you can bet that the Financial Crisis is nowhere near over. QE 1 failed. QE 2 will fails as well.

Moreover, you can bet that additional, GREATER systemic risks will be playing out in the next year. The problems that caused the 2008 disaster are still out there. The only difference between now and back then is that we’re running out of band-aids to cover them up.

2) Currency intervention, trade wars, and volatility will become the norm

The Rest…HERE

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