Going for broke?

[loosecannon]

This is a meaningless conversation as long as bond prices are dropping, which is the case currently. A private switch over to precious metals and private monies will emasculate any double down strategy by the Fed.

Not at all if the Fed is prepared to monetize the entire debt, which I believe is the plan in motion.

 

[Toro]

Strange to see this. About an hour ago I was having this same conversation in regards to my gambling degenerate brother. 1T, 2T, 4T but 8T only after the debt limit is raised. The Fed can play with that limit a little but not much and if 7 trillion does not cause a bubble then that is all she wrote and everybody but the Fed knows it.

But that's the thing, Willie. IS there a limit? In a world in which all currency is fiat and every nation in the world wants to debase their currency there is no limit at all, ever.

Antagon called this a game of chicken. But the deal is we can print the most money by far as long as our money is the last refuge. So in the end we not only win but we accomplish what globalization intended.

Unless of course everything goes horribly wrong. But when you are going for broke you have already resigned yourself to the worst.

No, there is no limit.

 

[Flopper]

Fed has no choice but to continue to monetize the debt. They are gambling that economic growth can be increased above 3% before the inflation sets in.

Even if Moody's cuts the ratings on US debt, the US will still be the place to park large sums of cash. Why? Because the US needs huge amounts of capital to fund the operation of the government. Other countries such as the Scandinavian countries may be rated higher but they do not need to borrow as much as the US, therefore they will not be able to provide the amount of treasury bills needed. The bottom line will be interest rates on treasuries will go up eventually adding another 100 billion or so to deficit each year.

 

[loosecannon]

Fed has no choice but to continue to monetize the debt. They are gambling that economic growth can be increased above 3% before the inflation sets in.

exactly. But even the inflation itself is a GOOD thing if it doesn't go all Wiemar. It increases our competitiveness, helps us pay down the debt and increases our money supply. In fact it increases the world's money supply. And if you believe as much as I do in the magic of money supply you believe that is critical.