Well dear friends, QE2 is comming to an end,
What does that really mean, and what has all the fuss been about?
We put cute names and labels of earth shaking actions to make them pallatable to the average person, but the real intention is to hide the reality of what is happening.
QE2 or Quantitative Easing is another way of saying that the United States Federal Reserve has printed $ 600 Billion out of thin air and used this freshly inked paper to purchase 85 % of the Treasury Securities issued in the past 6 + months.
This giant Ponzi scheme has allowed the Fed to keep interest rates artifically low while flooding the market with inflationary paper, which has been used to pay the interest on our national DEBT.
What? We are printing money out of thin air, and using this to buy our own bonds?!!
As of June 30th, this program will end.
Now what!
How will we be able to continue selling $Trillions of new Treasury securities and record low rates of interest?
The answer is we won’t.
After this program ends, we will have to look to foreign buyers.
China, Saudi Arabis, possibly France and other Euro nations, as well as some hostile people with huge petro dollars such as Iran, Venezuela, et al.
Will these foreign nations be willing to lend us money at depressed interest rates.
HELL NO!!!
The days of cheap money are destined to come to a swift end.
5%, 6%,and higher are in our immediate future, and the drag on a very fragile economy will drag us to the precpice of a precipitous drop.
More later,