We are now at a perilous juncture in the financial markets. The Fed’s attempt to revitalize the economy and markets through interest rate cuts have failed. Fed policy options are now approaching the end of the line. It is taking stronger and stronger measures to achieve the desired result. The Fed is between a rock and a hard place. If it continues on its present course, it risks creating rampant inflation leading to an international flight out of the dollar, which could then lead to economic and financial disintegration. If it chooses to accelerate monetary expansion, it could in effect shatter the whole monetary system based on the dollar standard. On the other hand, if it refuses to accelerate credit creation, the consequences would lead to a severe depression. I believe this is the Fed’s greatest nightmare – the looming ghost of another Great Depression. For these reasons it is pumping money furiously, monetizing debt and intervening through back channels in the stock market. The Fed is pumping money into the banking system, which in turn is financing the government deficit. And the government is also doing its part by spending feverishly and thereby creating deficits. Jointly, they hope to delay another depression. Rather then allow the natural adjustments of the market to cleanse the system of all malinvestments and excesses, it is choosing to delay them or postpone them indefinitely.
Vou continuar a ler e a publicar aqui excertos do artigo do Jim Puplava, que é de ler na integra através do link que deixei no primeiro post.
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