FURTHER QE TO BRING HYPERINFLATION CLOSER AS FED IS OUT OF SHORT DATED BONDS
NOVEMBER 4, 2012
One Reason that the Increasing Inflation is not more obvious to the public is that the Official Statistics are Bogus and not just in the U.S., but in China and other countries as well. The other is that the Velocity of Money is now extraordinarily low. Higher and increasing Monetary Velocities are associated with higher and increasing Inflation.
Only Operation Twist – in which The Fed sells short-dated Treasury securities and “Sterilizes” those funds by using the same funds to buy long-dated ones – is arguably non-inflationary because the proceeds do not circulate in the economy. All the other Fed QE and Related Actions are Price Inflationary. But note well that The Fed has nearly run out of short dated securities to sell. Thus ongoing and all further QE will be Price Inflationary. In sum, the Money Printing will continue bringing Hyperinflation even closer.