.... we are going to clear the bad debts and reduce the derivatives mountain. this means the USD will go up, gold and silver down, and we all get back to saving and a more constrained way of living.
and no, the Fed will not be able to save everyone's assets. Ben is going to be punished severely and will go down in history as one of the worst central bankers that ever lived.
Ok, so just to play devil's advocate on this one for the moment so that I better understand your argument:
If we're clearing bad debts and derivatives, yes, that's going to deflate the money supply (all of them except base-money). Obviously the Fed is trying to counter-act that with new base(ish)-money. Are you simply asserting that the Fed cannot possibly (or politically, rather) print enough money to counteract the real deflation that's happening?
On the surface, the numbers may work (as horrible as it is to print one's way out of this situation). If the world is over-indebted by about $150T, you need about $15T in new base-money to support it. Ben's already printed a few Trillion. QEternity will probably expand into at least $100B/mo; ie, $1.2T/yr, and other central banks are doing the same. So they'll collectively probably print at least $15T total within 5-7yrs.
Or are you simply arguing that the injection of base-money is not relevant since all it'll do is distort the global economy to the point of massive dislocation as opposed to actually offsetting deflation?
i'm asserting both. politically Ben won't be able to get away with it with either the ppl or investors. what is Bitcoin about after all? it's a revolution against what Ben is doing. also, the elite/investor class cannot afford to destroy the USD which is the true basis of their wealth as illusionary as it is, not gold. they won't let him hyperinflate. plus the size of the derivatives tower, depending on how you measure it, is in the quadrillion range. he will never print so much to fill that hole. and i think the investor/speculator class has been busy offloading their bad assets onto the suckers who've piled in over the last 4 mo having been convinced we are heading into the next reflationary cycle.
if he does try to print, yes, the distortions will kill the economy. didn't he just announce QEternity in September and what has happened since? we're are still deflating and much of the world is in recession including the US. my cycle work suggests that we are heading into another "bust" phase of the boom/bust cycle that this type of monetary disorder creates. in the end, it won't matter what Ben does; he'll lose control along with the other CB's.
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