Thursday, September 13, 2012

Helicopter Ben Bernanke Delivers: Unlimited QE Forever

The Federal Reserve has launched Quantitative Easing Part 3. The announcement read that the Fed will print $40 billion per month to purchase mortgage securities.

How long will this program go on for? There is no time limit. The Fed will purchase assets (and re-evaluate periodically if they should purchase more) every month until they feel the economy has improved enough to stop printing.

Those of us who have taken the time to study real economics understand that the Federal Reserve printing money hurts the economy. This has created the ultimate paradox and set us up for maximum disaster.

Think of a friend of yours who is extremely drunk at a party. One of your other friends walks over and says that to get him feeling better he will give him another beer every 15 minutes forever. If that doesn't work he will start doubling the amount of alcohol he provides him every 15 minutes. If that doesn't work he will double it again.

This is what Bernanke has just announced. Unlimited QE forever. He will pump the economy with alcohol and drugs until it sobers up. In addition, he has promised to keep interest rates at 0% through 2015 protecting speculators who are currently loading up on the most toxic of assets (that will explode when interest rates rise).

I spent all of June, July, and August endlessly discussing the extreme pessimism in the precious metals and precious metals mining shares. See Inside The Mind Of A Tuna: How I Invest & Why. For those that had the courage to make a purchase over the summer during the maximum point of pessimism as I was pleading to buy, I congratulate you.

If you own 0% of your personal wealth in precious metals it is the equivalent of living your life without car insurance, health insurance, home insurance, or life insurance as a nuclear war is taking place in your city right outside your door. There is a mad man at the helm of our Federal Reserve.

It takes 5 minutes to open an account by following the link below. I am not recommending this as an investment, I am recommending it as insurance.

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