Thursday, March 19, 2009

Setting the stage for INFLATION

By committing to buy Treasuries and double the purchases of mortgage debt, the Federal Reserve signaled it's determination to avoid a repeat of the Great Depression and it's willingness to pump as much cash into the economy as needed to end the current crisis.

This is called monetizing debt, the cause of currency devaluation. Take a look at what happened to the USD vs EURO yesterday after the announcement.

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