JIM SINCLAIR: QE3 TO INFINITY-THE FINAL END GAME
SEPTEMBER 22, 2012
Jim Sinclair has sent an email alert to subscribers discussing the background of the OTC collapse in the wake of Lehman Brothers, and WHY the Fed has no other options than to continue QE to infinity. Sinclair states that the coming end game will be the recognition of the weakness of the Fed’s balance sheet, and a resulting collapse in confidence in 2015-2017.
As QE3 to infinity moves ahead, the balance sheet of the Federal Reserve continues to acquire worthless paper in exchange for dollars. Junk moved onto the balance sheet of the US Federal Reserve as the common share of the USA, the US dollar, continues to expand exponentially.
The end game problem is an extended recessionary business conditions going into 2015 to 2017 wherein the supply of dollars continually expands, the US Federal Deficit grows, US state deficit spending continues to grow and the quality of the Federal Reserve balance sheet proceeds to deteriorate further.
Therefore the end game is the perception of the weakness of the lender of last resort, the Federal Reserve’s Balance sheet, as it impacts confidence the US dollar and US interest rates.