Fiat currency wars against hard assets. Global central banks keep printing and want you to accept paper as if its backed by hard assets. Ultimately it is, everything is priced. With massive money supply increases globally. Hyperinflation is in the cards. Why are currency rates within relatively narrow bands? Because everyone is printing. With printing comes the need to convert that paper into hard assets quickly. The velocity of conversion will create asset bubbles in various asset classes. The dollar is holding up well because counter party central banks are in the same demise. With money supply increases, the central banks are stealing money from masses. As money supply increases it forces you to hold less of it. If you hold cash, you loose value.
---The velocity of money will keep increasing. Interest rates will rise. The central banks control the short end, the long end indirectly or directly through QE. As QE tapers long end gets out of whack quickly. The yield curve will steepen.
1) central banks print
2) money supply increases
3) velocity of money increases
4) short end interest rates held low fixed
5) long end held low fixed with QE
6) hints of QE taper, long end snaps up.
7) long bond yields jump up to 15%.
The question becomes when will they decide to break the system. And why would they even need to. Austerity will be forced on the USA. The system breaks when counter parties wont accept the dollar for trade or will demand multiples of the amount to buffer against dilution of value.
If asians refuse to buy US debt, the FED steps in and buys unlimited quantities of it. Yields can be drifted higher and higher till the wealth held overseas gets decimated. You effectively destabilize your counter party's books.
Holding hard assets is the best scenario to protect against dilution of paper wealth.
---The velocity of money will keep increasing. Interest rates will rise. The central banks control the short end, the long end indirectly or directly through QE. As QE tapers long end gets out of whack quickly. The yield curve will steepen.
1) central banks print
2) money supply increases
3) velocity of money increases
4) short end interest rates held low fixed
5) long end held low fixed with QE
6) hints of QE taper, long end snaps up.
7) long bond yields jump up to 15%.
The question becomes when will they decide to break the system. And why would they even need to. Austerity will be forced on the USA. The system breaks when counter parties wont accept the dollar for trade or will demand multiples of the amount to buffer against dilution of value.
If asians refuse to buy US debt, the FED steps in and buys unlimited quantities of it. Yields can be drifted higher and higher till the wealth held overseas gets decimated. You effectively destabilize your counter party's books.
Holding hard assets is the best scenario to protect against dilution of paper wealth.
