[quote author="awgee" date=1253240980][quote author="BondTrader" date=1253237688]
Bottom line is they will do the right thing evenutally, but by then, our dollar will probably lose another 50% and we have double digits inflation and unemployment.</blockquote>
Can I disagree without being argumentative? Or maybe put out a different point of view for consideration.
I do not think Bernenke can or will be able to do the right thing.
Credit is contracting, (real deflation), and if B-52 Ben were to stop printing, ..., well the economy built on government debt will collapse.
Doing the right thing entails exposing the emperors nakedness. JPM, GS, BofA, C, and others would be shown to be insolvent. All the bad money, (AIG, FNM, Freddie Mac, GM, Chysler, GE, etc.), being propped up right now at the expense of the the good money, would be Chapter 11.
In a fiat monetary system with a fractional reserve banking system, constant and endless inflation is necessary to keep the economy from collapsing. It is past the point of no return. The national debt and deficit can not be paid without printing more and more and more. The punchbowl can not be removed.
There is only one road left.</blockquote>
Thanks for the feedback, that's the whole purpose of debating, if we all agree with each other 100%, then where is the fun?
Let me clarify what I meant by "Doing the right thing", I'm just saying eventually Big Ben will be forced to raise rate as fast as he dropped it.
Personally, doing the right thing will mean the following and you are absolutely right we are not going to do any of those soon enough...
1. Tell everyone we fxxked up, we can't pay back those trillions of debt we sold, and we need to restructure.
2. Stop printing billions every week.
2. Raise the rate back up now to save the dollar from collapsing.
3. Reinstate market to market accounting rule immediately.
4. Aduit the Fed.