June 9, 2009 4 Comments
ATLANTA— I keep watching the headlines, waiting for the big day to come. Will it come in a bang? Or will it play out over a year or two of painful, elongated decline? The continued debasement of the dollar by our federal government through Barack Obama’s record deficit spending and through Ben Bernanke’s quantitative easing is going to have serious consequences, I am certain. I would love to be wrong, but I fear big-time inflation in the upcoming years. One of the greatest tenders for inflation is when foreigners significantly slow down or end purchases of your government’s debt. And China is giving every indication they have no more appetite for U.S. treasuries and mortgage-backed securities.
So — will it come with a bang? Will we have a week in the upcoming months where there is a dramatic and precipitous plunge? A run on the dollar, where everyone tries at once to liquidate their holdings of U.S. dollar denominated debt? Or will the dollar just be slowly whittled away, as foreigners and investors slowly transition to safer holdings?
That’s what I am waiting for and watching for. And it really, really bothers me. It is time for an end to the fiat monetary system. But I fear what that end might bring us.