Fed Starts Printing Money

Actually, we don't need to print money. It's created electronically out of the electronic ether. The Fed announced they will buy $1.2 TRILLION dollars in government debt. They have no choice. Obama and Congress have just passed a budget that will cause a deficit of $1.7 TRILLION dollars. This is a staggering sum of money.

It works out to be $6,000 for every man, woman, and child. Never mind whether or not you believe what Obama is trying to do is going to work. I doubt the government will be able to borrow that kind of money at an interest rate we the tax payer can afford.

So what does it do? It prints the money. This is a very risky move by the Feds. If the economy moves into hyper inflation, because of this it will wipe out just about everyone. They government is now desperately trying to keep us from going into a Depression and this may be their last move. If inflation or the FX markets cuts them off from creating money out of thin air, and if the interest rates rise, we are in big trouble. It might be time for me to get my guns because there will be riots in the streets as people lose their jobs, savings, and livelihoods.

For now, they are getting away with it as there is still deflation and the bond market is holding up. But I'd be watching the bond, currency, and commodity markets. I am long currencies, gold, silver, energy and short commercial real estate. Be prepared folks, because if this move doesn't work, we could be in a whole lot of trouble very quickly.