A Recent Alert - Fed Prints a Trillion
Friday, March 20, 2009, 8:55 pm, by cmartenson
Below is an alert I sent out on Wednesday evening. I want everyone to see what is at the forefront of my thinking right now.
I am busy writing up my next layers of thought around this development and will make that the basis of my next Martenson Report or two.
Why? Because this recent action by the Fed is a "game changer."
In a shocking development that I frankly hoped we’d never actually see, the Federal Reserve dropped a bombshell yesterday and announced that it is going to create an extra $1 trillion dollars out of thin air to support the spending desires of the US government and to drive down interest rates for mortgage borrowers.
Of course, this will continue to punish savers and pension plans, but those, frankly, are of no concern to the Fed.
Below I explore this outrageous turn of events. Please note that I have not had much time to digest this incredible news and that I reserve the right to add to (or amend) my thinking over the next few days.
Excerpts:
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In fact, the constant drip-drip-drip of news about self-dealing by insiders with zero legal consequences for the perpetrators leaves me with the queasy feeling that every attempt at finding a legitimate resolution to this crisis will be thwarted by a crowd of Wall Street insiders who simply cannot resist an opportunity to redirect money into their own pockets. But that’s another story.
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From here I am expecting several things.
1. A continued decline in the dollar, possibly turning quite ugly at some point over the next couple of months
2. A continued increase in gold (but with heroic attempts to cap its price by various central banks and their proxies)
3. For commodity price increases to begin soon (due to a falling dollar and massive printing by Japan, the Bank of England, Switzerland, the US, and the 150 other countries that are now scratching their heads and wondering why they shouldn’t just print up a few thousand pallets of their own currencies).
4. Bonds will continue to behave counter-intuitively (that is, to rise in price when they should be falling)
Finally, I am expecting this latest “bold initiative” by the Fed to fail, and fail spectacularly.
More on this later as events develop. Today was a stunner. The game has now shifted to a new set of rules.
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Graphs, Charts, Current Analysis, Comments: http://www.chrismartenson.com/blog/recent-alert-fed-prints-trillion/15339
HOW MUCH IS A TRILLION ?: http://www.chrismartenson.com/crashc...-much-trillion