Friday September 21 2007
The Fed's Monetization Madness: A Word of Warning
I'm sure that most of you remember back in the first week of August when CNBC market analyst Jim Cramer was screaming hysterically: "Open the discount window!" Well, it seems that Bernanke and Company have done exactly what he asked. As of the past week, commercial banks are now taking $2.7 billion in loans per day from the Federal Reserve discount window. With just this lending from the discount window, the increase in the U.S. money supply has jumped to an annualized rate of more than 50%! I've said this before: The biggest red flag imaginable for pending economic catastrophe is the Fed massively monetizing the debt. (Much like I described in the opening chapter of my novel "Patriots".) This is a highly inflationary measure. And this is exactly what the Federal Reserve is presently doing. If the discount window stays open for an extended period of time, then be prepared for at least double digit inflation, and possibly hyperinflation. I'm not saying this in jest.
Let's face it, inflation is already upon us, at least for commodities. The prices of consumer goods are bound to follow. My good friend Fred the Valmet-meister recently sent us a link to a web page that shows the upright spike in Uranium prices. Where is the top? Who knows? The run up in the prices of base metals, precious metals, and the exotics (such as uranium) are indicative of a primary bull market in commodities. As confirmation, we observe that the price of wheat has tripled to $9+ per bushel, gold has zoomed up to $730+ per ounce, silver at $13.25+ per ounce, and oil is at $82+ per barrel. In times like these, all un-backed paper currencies are trash, and all useful tangibles are treasure.
The Schumer could start to fly very soon, folks. Be ready. If you have any unfinished pre-WTSHTF shopping, then now is the time to make that trip to COSTCO, and to place those mail orders. (I'm sure that our loyal advertisers would appreciate your business.) And if you are an urbanite or suburbanite that has been delaying buying your "Hidey Hole", then this may be your last chance to make your move to the country before the coming winter. There is a storm coming...