Guest Post: Get Ready For An Epic Fiat Currency Avalanche
http://www.zerohedge.com ^ | September 14 2012 | Tyler Durden
Posted on Friday, September 14, 2012 1:21:03 PM by Para-Ord.45
Quantitative easing has shown itself to be impotent in the improvement of America’s economic situation. Despite four years of free reign in central banking, employment remains dismal in the U.S., the housing market continues its freefall, and, our national debt swirls like a vortex at the heart of the Bermuda Triangle. Despite this abject failure of Keynesian theory, the Federal Reserve is attempting once again to convince you, the happy-go-lucky American citizen, that somehow, this time around, everything will be “different”.
I predicted simultaneous QE programs by the two central banks because it made perfect sense, at least, for those with diabolical intentions. With engineered currency devaluation in full swing in the EU and the U.S., the implosion of both currencies, especially the dollar, will be masked. That is to say, the dollar index is measured in large part by comparison to the relative strength of the Euro. If the Euro falls through overt printing, the dollar will appear stronger than it really is, duping the general public and giving bankers more time to inflate.
I believe QE3 will be the final straw for many foreign holders of U.S. debt and dollars. The world reserve status was already under severe threat after QE1 and QE2. The MSM has virtually ignored China’s bilateral trade agreements building since 2010. In the past two to three years, China has made deals with Russia, India, Japan, South Korea, Iran, and the ASEAN trading bloc (most South-Asian nations), that remove the dollar as the world reserve currency. And, this year, China has arranged a similar bilateral deal with Germany
These countries combined offer at least 30% of global GDP, and could easily annihilate the dollar if they decide to dump the greenback completely as the world reserve. With the advent of QE3, this is now a certainty.
Open ended inflation is exactly what destroyed Wiemar Germany, and more recently Zimbabwe. The central banks and their lackeys will claim there is no comparison. I beg to differ. When a nation expands debt spending instead of cutting it, and then monetizes that debt through fiat printing in order to allow even more debt to accumulate, that nation is not going to survive. That nation will eventually hyperinflate, then default, then collapse, either turning into something entirely alien, or fading from history altogether. This is what we have to look forward to in light of QE3, the final and infinite stimulus adventure. Something has to give, and it has to give soon. My bet is on the dollar…
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