Central NE | Buzz77 - 1/27/2012 00:08 I just finished reading one of John Burns' Favorite books, "When Money Dies", the story of the German Weimar Republic. IF history repeats itself, massive hyper-inflation COULD lead to TRIPLE DIGIT INTEREST RATES. German interest rates at one time during the 1920's exceded 125%. The FED has no control over the bond market. Not saying it will happen, but at this stage of the game anything is possible.
The Fed has absolute control over the bond market. They have unlimited money and no competition. What did they lend to European banks in 08 - something like 17 trillion that Bernie Sanders uncovered. Since then, they have directly bought Treasuries to lower yields. Since August, they have been issuing put options to themselves so their own banks can buy low yield treasuries with no downside risk. POMO, Maiden Lane, QE2, Stealth QE3, and now QEinfinity. What did they lend to Europe last month? It was a staggering figure. They will make themselves whole one way or another.
In 1920's after Germany had just been beat in war, every competitive currency was a weight of gold which revealed the weakness of their fiat money very quickly. The Federal reserve has two huge advantages over Weimar Republic. 1. world reserve currency and 2. no gold currency exists anymore in the world. This allows them to control the bond market. Their advantage in the rigged monetary game will only last until enough people wake up and decide not to play. Like WOPR found out in War Games: The only way to win is not to play.
The point here is as long as a majority of people do not see their money declining vs. gold, and as long as the Federal Reserve has the ability to print unlimited money in the WORLD's reserve currency, they can control the bond markets and keep interest rates as low as they want them.
Only when people stop accepting their currency or when the people take back the power of the printing press (aka Ron Paul) will their ponzi come crashing down.
Edited by Hayinhere 1/27/2012 11:21
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Printing money and thereafter
