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The 4.5 trillion dollar balance sheet. Continued QE
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John Burns
Posted 10/31/2014 12:27 (#4153782 - in reply to #4153746)
Subject: RE: Govt. Bonds are also Assets



Pittsburg, Kansas

I could agree that we have a "rigged market". But that is as far as I could go. LOL

Price controls never work long term. Never. They can sometimes be used short term for manipulating a market, which is what the Fed is doing.

I don't know that the expectations of high inflation are expected at the same time of low interest rates. I expect we would have high interest rates right now if not for Fed intervention in the market.

I'll admit, I've been way wrong. The Fed has been able to pull levers and rabbits out of a hat a lot longer than I thought they would be able to. Japan is a look into our future. Maybe not the exact same future, but a future of diminishing buying power of the public and massive debasement of the currency. It will be interesting to see what plays out in Japan in the next few years. We are playing with the same fire.

I tend to look at things on a more theoretical level. Not at a level to go out and day trade by. I'm never looking at what is going to happen tomorrow but what is going to happen 5, 10, 20 years in the future. That is where a lot of arguments on the "future" get bogged down. If a day traders future is "tomorrow", then he and I are on completely different horizons. Even next year or the year after is too close for me to have an opinion. Perfect example is I bought some machinery a few years back sooner than actually needed because I thought interest rates would be going up soon. Got that one wrong.

But I still think it is foolish to ignore historical examples of empires growing beyond their capability to sustain themselves. To ignore examples of fiat currencies being debased and failing because of it. Examples of excessive debt and leverage and the inability to sustain unsustainable levels of debt. I believe it would be well for us to examine and learn from those historic examples that did not end well. And those historic examples tell me our current situation will not end well. Maybe it will not be this year or next. Or even the year after. I don't do short term because I suck at it. But I don't see us currently improving our current situation and I think there are plenty of historic examples that warn of the potential outcomes. Two paths to choose, both leading ultimately to the same dire outcome. Just different ways of getting there and different winners and losers along the way. I'm still not certain which path we ultimately will travel, but it looks like to me we are past the point of no return of turning around.

John

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