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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Wednesday, December 05, 2012

Robert Wiedemer: Awaiting The Aftershock | ZeroHedge

Central planning has now painted the American government into a corner and off the rails spending and moentization of the debt will probably prove impossible to stop.....
These more pernicious threats are the dollar bubble ("printing money") and the government debt bubble ("borrowing money"). While both are expanding at a sickening pace, in the near term they deceptively make things seem much better than they are.

But, like all bubbles, they are unsustainable. And when these collapse, they are going to take the entire financial system, and very possibly the currency, with them (a.k.a. the "aftershock")

Bob predicts the rupture of both these bubbles will most likely happen in the next 2-4 years and accelerate astonishingly rapidly once it begins. Part of the reason for this is that the Fed, now boxed in by its committed course of action, will print like mad to slow the process down -- which ultimately will serve instead as fuel for the fire. This will be the point at which the Fed loses control of interest rates.

Wiedemer is fairly confident that the Fed is well-aware of this dire probability, but finds itself increasingly stuck to avoid it. At this point, the major financial markets (stocks, bonds, housing) are so dependent on Fed liquidity that any efforts to withdraw the punchbowl will send prices lurching downwards, threatening the weak global economy. It's now a binary choice between damned-if-it-does and dammned-if-it-doesn't.
The something for nothing crowd has completely hijacked the American government. Massive central government spending and borrowing or taxing as the socialist seem to want to do now will only prove to be folly as productive dollars are taken out of American hands and put into the hands of know nothing bureaucrats.

As we learn from all central banks gone wild moments, from Zimbabwe to the Wiemar Republic, folks wake up one morning and discover that they are destitute.

Robert Wiedemer: Awaiting The Aftershock | ZeroHedge


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