Re: QUOTES OF THE WEEK

In article <49e95c76$0$90262$14726298@xxxxxxxxxxxxxxx>,
head for the hills <move@xxxxxxx> wrote:

From Richard Russell, editor of Dow Theory Letters, in remarks posted on
his website on April 13th:

"The bond market may be 'backing off' for fear of rising inflation. Fed
Chief Ben Bernanke has embarked on an all-out policy of 'print and
spend.' The government is creating trillions of Federal Reserve Notes
in a massive effort to support a debt-laden economy. Today a trillion
is the new billion. The sheer amount of fiat money that is being
created is frightening many of our creditors, such as China and Germany.
Frightening them to the point where the talk is of a 'new world reserve
currency.' The new currency will be a basket of currencies including
the yuan, the euro, the dollar and gold, and it will be run by the IMF.
As Bernanke goes wild in printing, our creditors become increasingly
worried about the dollar as a store of value. 'Let the dollar take care
of itself,' thinks Bernanke, 'Our first priority is to ward off
deflation and another depression.'"

. . . and from David Morgan, editor of The Morgan Report and the
Silver-Investor.com website, in commentary posted on his site on April
17th:

"At some point the world monetary system will probably go back to some
sort of a gold standard, but in my view it will not be a true gold
standard but some kind of pseudo gold standard. No one really knows the
future, and I'll be the first to admit it, but what we are seeing now is
what we see at the end of all great inflations and that's a distrust of
the fiat money system and/or a distrust of the leading currency. Russia
is raising its hand and asking, 'Why should anyone trust it?'

There are so many U.S. dollars in the financial system. In my view it
is collapsing, but the reason the system hasn't completely collapsed yet
is because the U.S.'s trading partners, such as China and Japan, are
holding on to dollars. So they're not putting them into circulation,
but once that happens or they get scared or try to exchange too many of
those U.S. dollars for real goods or services, it could ignite more than
an inflation - it could start a currency crisis."

This doesn't really make any sense. Yes, the Fed is printing up lots of
money. But it's doing so to counteract what would otherwise be a massive
contraction of the money supply brought about by the de-leveraging
occurring in the financial industry, so this isn't really "new money"
that was never previously in the system.

--
"The game of professional investment is intolerably boring and over-exacting to
anyone who is entirely exempt from the gambling instinct; whilst he who has it
must pay to this propensity the appropriate toll." -- John Maynard Keynes
.

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