The worry that many people had this time last year (or gleeful anticipation (for those who held gold)), was that with all the QE and the bailouts, not to forget the stimulus, hyper-inflation would become ignited in USA and that would signal the final death-rattle of Evil Fiat currencies. All of those pesky toxic MBS and CMBS and CDO etc would have magically regained their AAA status and homeowners would have been able to service their mortgages. And everyone could have “unlocked” the extra equity in their newly valuable homes, and gone out to spend-spend-spend, (don’t forget 70% of America’s GDP is consumers spending, so what’s good for the bimbo with a credit card is good for America), and The American Dream would have been rocking and rolling all over again, in three part harmony!! Then gold would reach $10,000 and become the only true currency, and at last order would be restored to the world; Ron Paul would be elected President, and everyone would live happily ever after.
Nice day-dream, but it didn’t happen.
But just think how wonderful the world would have been if the Fed had done its job and created 20%, nay 100% inflation per year!! Now folks are angry, they say the Fed are to blame. And they can’t understand how, after nearly a hundred years of creating inflation, the Fed can’t create some when it wants to? America, and the world, is waiting with baited breath, to find out “if” and in that case “when” Ben is going to be able to get it up.
But sadly Ben’s much awaited speech at Jackson Hole was a bit of a disappointment, some folks felt a bit like Linda must have felt after the Prom, when Chuck passed out in the bridal suite, after vomiting in the flower arrangement. Although it was interesting to see the 30 Year bounce from 3.55% to 3.7% that happened the moment that Ben explained that his “Cunning Plan” was all along to push long-term interest rates down.
And the “Good News” is that $140 billion of the $1.25 billion that the Fed advanced to buy agency debt and MBS got repaid.
Err…One question Ben:
“How much did you pay for the $140 billion that got repaid? Like did you make a profit, or are you going to wait until Ron Paul’s audit before you let us know how…
