Comments on: The EU/US Non-Aggression Pact

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Mon, 28 Jun 2010 10:20:43 +0000

Negative feedback. Otherwise known as howl round. And that is what is about to happen.

The US is out of control. I think there are enough print monkeys in positions of power around Congress and round Obama that they will go for a new and bigger print/borrow. And soon.

How soon? Keep an eye on the interbank rates. As US banks start to pull in their lending and hoard their cash even more, that's the signal.

By: Rob

Rob — Mon, 28 Jun 2010 10:13:04 +0000

The original plan seemed to be to print money in order to avoid austerity. That didn't work, so now we have to print money and have austerity. I don't think that people will accept this so easily, especially if the money is going to the banks. The kind of cuts that they have announced in the UK will be impossible to implement – but they know this. The tactic is to announce 25% with the hope of getting 10%.

I agree that the US will have to print a lot. The melt down of the Euro has made this a certainty. The irony is lovely to behold. The US gives the banks lots of money – they use this to speculate on the Euro and make a packet. This causes the Euro to go down in value – thus forcing the US to print even more. Talk about out of control.

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Mon, 28 Jun 2010 09:34:43 +0000

You certainly can have austerity and print. You just have to make sure you only give the printed money to the banks and not to people who you neither know nor care about. Simples!

i think it is now beyond question that the US HAS NO CHOICE but to print againa and on a scale we have not seen yet. I think it will fail. I also think the US may chose to engage in another war for resources.

By: Rob

Rob — Mon, 28 Jun 2010 09:06:05 +0000

This is a very interesting post.

Can you have austerity and print money at the same time? Now that most people are sure that a double dip cannot be avoided, then this seems to be the new plan, especially for Europe. Europe needs to announce the austerity to keep the bond markets slightly happier. It is also a good time to try and trim the public sector, which does seem to have grown too big in my opinion.

There is an interesting article in the Telegraph from Mr Evans-Pritchard which has a similar theme.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7857595/RBS-tells-clients-to-prepare-for-monster-money-printing-by-the-Federal-Reserve.html