Qe To Infinity

Sources say today’s announcement will be an announcement of QE to infinity. Dr. Bernanke will couch his words carefully to assure the market that the Fed will maintain sound monetary policy to support a weak recovery in spite of essentially no fiscal policy from the government side of the equation. His verbage will indicate that an open ended monetization of interest rates will NOT be inflationary since it will be limited by GDP numbers. Therefore inherently Dr. Bernanke will be preventing inflation from moving into a hyperinflationary zone. He will also mention that the cost of essentials could have a “negative impact” on the consumer AND GDP. He will NOT mention the word “stagflation” anywhere in his statement even though this will by definition be a stagflationary situation UNLESS Ben can reach escape velocity. ESCAPE VELOCITY is what he is trying to achieve and this is one reason why he will give for this monetary policy decision. THE VELOCITY OF MONEY can be achieved if complete confidence is finally lost in the value of fiat and the money begins to be spent on anything of value as fast as one gets fiat into their hands. This is not what the Fed wants but Ben believes that he can stop the final breakdown of confidence by allowing interest rates to rise JUST at that critical juncture……which is just as velocity of money rises and JUST before a hyperinflationary crisis arises. Of course this will by definition be a severe stagflationary event prior to this critical time period. For those of you not familiar with stagflation I can refer you to the 70′s. This will be worse than the 70′s since our economic position is much worse in terms of infrastructure and unemployment. The 70′s was a cyclical downturn and this is far worse with NO structural repair occurring OR in sight. Don’t over-read the remarks from the Fed today. We have been in QE since 2008 and we have NEVER stopped…..use any weakness to add to you miners. gl