40% over the next twenty years? I wish. Try 40% over the next year or two.
I think that creditor nations are getting very close to punting on the Yellen dollar.
Peter Schiff is a bit self-aggrandizing but his grasp of economics is spot on. Hold Yellens at your peril.
As long as the US is still the 500 ton gorilla of the commercial world, which so far it is, the whole world will probably keep on colluding on US fiat money while loudly bitching and moaning. China, to save face, needs to keep on saying it got something for its cheap goods even if it’s a heap of IOUs.
Money is what people believe it to be, ultimately. Yes, supply and demand matter. However most of this QE funny money is not getting out to the street. It’s sitting in funny bank accounts. If not on the street, it can’t inflate street prices.
IMHO of course.
.... I was actually referring to the wording in the Q.E. plan that I heard on a financial planning show a few weeks ago. The hosts stated something to the fact that the QE was written up and planned in such a way that the value of the dollar would be devalued over the next few decades to compensate for the excessive printing of money. However the devaluation would not begin until a certain set time which I think they said either 2014 or 2016. Since they are now talking about another QE the devaluation would probably be deferred until that one ends which is of course dependent on the strength and stability of the economy at that time.
What I am saying is that it is a planned and timed event that will be dependent upon the stabilization of the economy (whenever that will be). The more QE's there are the larger the amount of devaluation. My guess is that they will keep on mounting more QE's until King Obama is no longer our King. This will create the illusion that everything was just fine and functioning well until the next leader of the country takes over.
While it's difficult to define what things are "worth", I would posit that the total value of some tangible or paper commodity cannot exceed the time-adjusted value of the total benefit that can be realized from that commodity. If Million Corporation, whose sole goal is to maintain a stack of $1,000,000 in currency, sells 10,000 shares at $100 each, then liquidating the company would yield about $100 for each share, so each share could be said to be worth $100. If someone buys a share for $150, that person immediately takes a $50 loss and the seller profits $50 in the sale. Conversely, if someone sells as share for $75, that person takes a $25 loss and the buyer makes an immediate $25 profit. The buyer or seller may for some reason think the stock is worth less or more than $100, but the asset has a certain value, and the fact that it may sell for more or less than that doesn't significantly change the fundamental value of the asset.
The Fed might attempt to increase the money supply in such a way as to mask the immediate effects, but once the currency is diluted in such a way that it can't readily be recalled, the currency will be immediately reduced in value, whether or not its price immediately reflects that.