Print More Money

By Greg Hunter’s USAWatchdog.com

The second round of quantitative easing (QE2) is scheduled to end June 30, and already there are calls for more financial stimulus to keep the economy from falling off a cliff.  The latest call came from Larry Summers, former head of the Obama Administration’s financial team.  In an Op-Ed piece that ran on Reuters last Sunday, Summers pitched the idea of a $200 billion cut in the payroll tax. The Reuter’s story said, “Fiscal support should be continued and indeed expanded by providing the payroll tax cut to employers as well as employees,” Summers wrote.  “Raising the share of the payroll tax cut from 2 percent to 3 percent would be desirable as well.” . . . He also said the economy would benefit from an extra $100 billion in infrastructure spending over the next several years and recommended additional aid to states and cities.” (Click here for the complete Reuters story.) The way I see it, Mr. Summers is proposing another $300 billion be added to the national debt.

Summers is not the only high profile economist that wants to print more money.  Nobel Prize winning economist Paul Krugman thinks the U.S. didn’t provide near enough financial stimulus back in 2009 when Congress passed more than $800 billion in new spending.  In a recent New York Times Op-Ed piece, Mr. Krugman said, “In fact, in important ways we have already repeated the mistake of 1937. Call it the mistake of 2010: a “pivot” away from jobs to other concerns, whose wrongheadedness has been highlighted by recent economic data. . . . Back when the original 2009 Obama stimulus was enacted, some of us warned that it was both too small and too short-lived. (Click here to read the complete NYT story.) Mr. Krugman implies that the money already spent to keep the economy from plunging (which in essence is more than $12 trillion including all Fed actions) has not really caused any problems.   He wrote, “This consensus was fed by scare stories about an imminent loss of market confidence in U.S. debt. Every uptick in interest rates was interpreted as a sign that the “bond vigilantes” were on the attack, and this interpretation was often reported as a fact, not as a dubious hypothesis. . .  Well, the bond vigilantes continue to exist only in the deficit hawks’ imagination. Long-term interest rates have fluctuated with optimism or pessimism about the economy; a recent spate of bad news has sent them down to about 3 percent, not far from historic lows.”

Mr. Krugman conveniently leaves out the fact the Federal Reserve has spent more than $600 billion in the past 8 months buying Treasuries that have artificially held rates down.  I suspect interest rates would be much higher if quantitative easing (QE 2 or money printing) was not Fed policy.  And what about the big increases across the board in food and energy?  These are not scare stories but facts that are quite damaging to the economy, especially the unemployed.  Still, economists like Krugman claim more money printing will save the day and create jobs.  With the 2012 election looming, that will surely be the path taken—inflation be damned.

Economist John Williams at Shadowstats.com thinks that is exactly what Fed Chief Ben Bernanke was signaling last week at the International Monetary Conference in Atlanta.  In his remarks, Mr. Bernanke admitted, “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.” In a recent report, Williams said, “Despite the mixed language in his comments on how well Fed policy has been working, I take the more-negative economic tone as an early warning of an eventual QE3 (third-quarter 2011).” (Click here to visit the Shadowstats.com site.)

Renowned gold expert Jim Sinclair was one of many I polled at the beginning of the year (in a post titled “The Most Predictable Financial Calamity in History”) who predicted QE would not end on June 30.   In an interview with King World News last week, Sinclair said, “We’ve come to a point now where you can actually predict that if QE was to be stopped, you would see an implosion in the general equity markets, and the wealth effect of that implosion on the decision making outlooks of business managers would be to restrict employment, restrict investment and to restrict earnings. . . . The impact of restricting monetary stimulation will open up a depression that will make the Great Depression look like kindergarten.” (Click here for the complete KWN interview.)

Sinclair expects gold to trade much higher this year and predicts after 2015, it will be priced at more than $12,500 an ounce.  You should not take Sinclair’s predictions lightly.  In 2002, he predicted gold (priced at around $350 an ounce) would trade at $1,650 an ounce by January 2011.  Today, it is well over $1,500.  In 1974, (the average price that year was $159.00 an ounce) Sinclair predicted gold would top out at $900 per ounce in 1980–it hit $887.50.  Sinclair says, “If QE is even slowed down, the net result would be a public loss of control on the part of what is seen as the U.S. economic management.” So, he expects gold will rise because the powers that be will print more money.

 

Comments
  1. Ambrose

    Greg,

    We don’t need another QE! The US economy is not getting better after QE1 and QE2 – it is getting worse.

    It is a wishful thinking that giving money to the banks would help to issue loans to small business and homeowners who were in trouble. No! The banks just pocketed the money and tightened their lending policy. As a result of not getting loans, small business were closed and homes were foreclosed.

    It is a wishful thinking that cutting taxes would put more money to employers and encouraged them to hire. No! Few jobs were created. It is risky to expand business when the economy is bad. Also, there is no need to hire anyone – current employees are more than capable to take over the jobs from their ex-associates (who were laid off).

    It is a wishful thinking that cutting payroll taxes would give more money to employees and they would spend more. No! When the economy is bad and many people’s jobs are insecure, it is time for them to save money for the rainy days. Not everyone can print money at will like Mr. Bernanke.

    Well, zero interest rate policy is not for you and me. While our savings might earn zero interest, the (latest) national average credit card rate is 14.83% (24.96% for bad credit).

    If Fed’s solution to the economic recovery is QE3, I think Doomsday is near (2012?). Bernanke might as well keep the money machine running and go fishing himself.

    • Greg

      Ambrose and Greg Davis,
      Thank you both for adding your comments and analysis to this post.
      Greg

  2. GREGORY DAVIS

    As a small business owner, I whole-heartedly agree with your assessment. I’ve lost faith in the judgement of all these so called “Expert Economist” gurus beginning with Greenspan.
    This deck of cards gained steam in the 1980’s with company mergers, CEO pay tied to stock prices, outsourcing, excessive environmental regulation, ever expanding government & taxes, & of course most recently with the financial fleecing of America by the banksters.
    Common sense tells you that if jobs are lost by the millions over the decades, people are taxed to death, & consumption replaces production, the deck of cards will fall along with the middle & lower classes.
    History will call this 25 year period as “The Big Lie”.

    • Art Barnes

      Gregory, you pretty well summed it up, but I would add it was about 40 years in the making, so a 40 year big lie nevertheless. The jobs which were lost to overseas were for the most part good jobs, not part time fry cooks at MickeyD’s.

      • GREGORY DAVIS

        True enough, Art. My point with the “25 Year Big Lie” was that starting in the 80’s, Wall Street & investors applauded the mergers, layoff’s, & outsourcing. CEO’s & stockholders benefitted mightily in the short term, at the expense of lost jobs, weakened industries, etc.
        This short term mentality has prevailed to this very day. Witness Corporations & our Government (QE2-3)still executing this & other “brilliant” strategies.
        I feel ambivalent being out of the stock market & in fact “shorting the Dow”, because I am in effect betting against America’s policies & industries.
        But a “Big Lie” is still a “Big Lie” no matter how you look at it!

  3. Sandy

    I guess many of us know that QE will never stop, but the one thing that stands out in Larry Summers call for more printing is that it would put the money into the hands of the employed. I’ve read somewhere, that the closer you are to the printing press, the more advantage you have during a hyperinflationary episode. So far the banks have had the advantage, now Summers suggests that workers should partake on the next round. That only leaves the unemployed and fixed income retirees to scrounge for survival. The only problem with that sceanario, is they will be the majority of the population.

    • Greg

      Thank you Sandy, Sean and Art for the pointed comments. Love them all!
      Greg

  4. Sean

    I think the best thing for America now is to take the next round of stimulus money and pay off every residential mortage in the country. This would get rid of the banking mess, raise the interest rates to a proper level. This would flood America with lots of disposable money. People would have extra money to spend and hopefully start new businesses. That would be a great platform for 2012.

  5. Art Barnes

    Greg, QE3 in my mind was never in doubt, only what form it would take, an actual announcement as before or more subtle and or under the table event such as buying toxic loans of the too big to fail banks. I’m betting on the former because why not, as you said alot of the players now (economists), most of Washington, Wall Street, & Banking are calling for it. Let inflation be dammned will be the result here, not to mention confidence in the dollar overseas. Every failed econony in history has done the same, that is, devalued its currency to keep the appearance of prosperity, the Romans reduced the silver in their coins, etc. – not one time did it work, but here we go again.

    On another note, the old buggy man, the “great depression” is still used to instill fear in the country, its been used ever since 1929. No evil will make the Great Depression look like kindergarten except the aftermath of a global nuclear war, which is highly unlikely. Just more scare tactics to prevent the belt tightening that is necesary for proper currency control.

  6. slingshot

    If we print too much money, we are in trouble and if we do not print enough, we are in trouble. Damned if we do. Damned if we don’t.
    They tell us one thing and we see another.

    ” Untill we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established”

    Think about what he said and what is happening. There will be no job growth untill those who are the real economy, feel the real economy has stabilised. And the Fed is kicking the Real Economy in the gut by subsidising the whole mess. Cash for clunkers and bailing out Fannie Mae and Freddy Mac. The only thing I have not seen are those TVA and CCC signs of the New Deal in this New Age. Health care, minimum wage and the fight over Unionization over job creation does nothing but inhibit recovery.
    Just because you do not see it doesn’t mean it’s not happening and if it is not happening now, doesn’t mean it will not in the future.
    I have heard all the arguments for gold and silver and if you choose to purchase some,I think it’s a plus. Gold at $10,000 and silver a $100 and the world will look much different.
    The failure to understand what future events these men of power, have set in motion, will be the greatest injustice to our nation and our families.

    • Greg

      Thank you Sling, NM, Mark M and Tom for weighing in on this one. I appreciate you all supporting this site.
      Greg

  7. nm

    I just have one question:

    How will Bernanke justify QE3 and will he give it to the banks again right before an election?

    I think if the banks get another bailout, people will explode (unless they do it discreetly without an announcement, like they are doing now & someone please explain to me how they are doing that now — something about lending via the discount window. Don’t quite get it).

    Thanks,

    • DebtBasedCurrency

      nm – Me thinks that they wanted to take care of the banks to keep the system intact at all costs. If / when they get hot money to the Sheeple, they will only turn around and get loans, sending the interest cash flow back to the banks. Gotta love debt based fractional reserve banking with a Gov’t Backing! For the banksters it’s “Sometimes you win some and sometimes you win it all”

  8. markm

    Hello Greg,

    I have communicated to you and others that our economy must get worse in order for our economy to recover. Just as the economy of 1980 got worse when Ronny tightened the reins on monetary policy, deregulated, and cut taxes, so will our economy worsen when Keynsian economics and neo-Marxist regulations are cast-off.

    Our economy is presently on drugs; drug rehab is not fun (so I am told).

    The sooner our government bites the bullet, the sooner we will see real economic growth.

    markm

  9. Tom

    Greg,

    Here’s my economic formula for all the mentally deranged Nobel prize winning economists that are loose from their cages:

    D + L = PM where,

    D = destroyed manufacturing base
    L = Lofty expectations of living standards
    PM = print money

    It’s a perfect formula for the destruction of any country.

  10. brian

    This is what is scary about big dumb institutions like the government. The government always faces failure the same way……by saying that it simply needed to do more of what failed.

    They printed money but not enough, they took our freedom but not enough, if only they could have more of our time, if only they could have more of our wealth, if only they could make more decisions for us, if only they could have more more more more more more things would certainly be better.

    Inevitably we are going to run out of stuff to give these morons, thats when they’ll start taking!

  11. Dave

    The FED MUST continue buying treasuries, but they’ll call it something different like a “treasury stability program”
    Since the FED bought about 80% of recent treasury auctions, who in the world will take up the difference if they cease buying?
    Nobody will, so they must continue the program.
    This cannot end well.

  12. mitchbupp

    We are Greece …it’s just the government cooks the numbers so much that reality is not a concept they can grasp. Thanks for another great article Greg

  13. Samantha in Tucson

    FRONTLINE re-aired a segment last night about the imminent warnings of (whom I call) an “American Hero” – Brookley Born. This woman has GUTS and stood up to Greenspan and the “ruling elite”. However, as history proves once again, the ruling financial elite won. She warned – repeatedly – about the derivatives market and tried to get people in Washington to listen to her.

    Here’s what one person wrote on her Facebook page:

    “brooksley: i’ve been involved with futures, et.al. for over 30 yrs. what i find extremely scary is that i’ve NEVER seen capital as concentrated as it is now, nor as leveraged. most players are on the same side of the boat. i firmly believe that ur statement that each blow up will b greater than the last is true. i believe that the financial markets are at the greatest risk point that they have EVER been.”

    Everyone should watch “The Warning” (PBS). It was right at the time and it is still right today.

    • Greg

      Samantha in Tucson,
      Great additional content for the site. Thank you for providing it to us all to read!!

      • Samantha in Tucson

        My apologies for the misspelling on Mrs. Born’s name in the first paragraph of my post: BROOKSLEY Born is the correct spelling.
        Thank you.

        • Greg

          Samantha,
          I am sure plenty of other folks have made that mistake. I did not know you misspelled it until now.
          Greg

  14. Hoppe

    Meanwhile, the media dismisses Ron Paul and his ideas to end the Fed. Is there any doubt the Fed policies are responsible for this mess? What if the Treasury had distributed the QE$$$ directly to each American adult – to the tune of $50,000, to pay off their debts, and purchase goods?

    The road to Serfdom is wide and winding.

    • Greg

      Hoppe,
      Do doubt at all! Thank you.
      Greg

  15. Sarkis

    I think Ben will extend QE2 for another 6 months. He will not admit to it that it’s QE3, simply an extension.

    • Greg

      Sarkis,
      No argument here!
      Greg

  16. kcramone

    Utter madness, re:QE3. As I write this, the news is reporting the DOW just fell 200 points ostensibly about the situation in Greece. Thank goodness I am out of the market. At this point, Greg, do you advise buying gold and silver, even though gold is fairly high? I followed your advice last year about buying gold and silver and have never regretted it. Best wishes,
    kcramone

    • Greg

      kcramone,
      I do not recommend that most people actively trade gold and silver. Gold and silver, at this point, are insurance policies. It should be physical and not leveraged in any way. Only you can decide how much insurance you need and can afford.
      Greg

      • kcramone

        That’s how I think of it as well; not for trading purposes.

  17. Rick

    Another excellent article. Thank you Greg.

    • Greg

      Thanks Rick!
      Greg

  18. Ambrose

    Greg,

    It looks like QE3 is coming whether we like it or not. I expect the QE3 beneficiaries will be the same as QE1 and QE2 – Wall Street, big banks and big corporations. As a return of favor, they will help Obama to get re-elected. As money flows to MSM, the media news will turn into a more favorable tone for Obama.

    The news about bad economy recently broadcasted by MSM might be a reminder to Obama that how much he depends on MSM for his popularity and re-election. If more money are printed for QE3, all the bad news about the economy will subside and disapppear. Once again, we will hear, “The US economy is heading to recovery again!”

    As I watched the movie,”Inside Job” directed by Charles Ferguson, I realized that many of the people who were responsible for the global financial meltdown are now working in the Obama administration. No wonder things are not getting better. I feel sorry for Martha Stewart who was convicted in 2004 of lying to investigators about a stock sale (to avoid a loss of $45,673) and served five months in a West Virginia federal prison camp. For $45,673, she served five months in prison. Yet the Wall Street thieves or robbers walk away free with millions of dollars and no presecution.

    I am afraid that the protests and riots in Greece will happen here soon. Be prepared!

    • Greg

      Thank you Ambrose,
      Ms. Stewart is very small potatoes now. I am not a big fan of hers because she sat on the board of the NYSE and knew the rules. That said, her conviction demonstrates how totally unfair and out of touch the SEC is. Good stuff man!
      Greg

  19. nm

    Sarkis:
    I think Ben will extend QE2 for another 6 months. He will not admit to it that it’s QE3, simply an extension

    Ah! that’s why I love reading this blog. I learn so much. This is exactly what the Ben Bernank wll do.

  20. Oldguy

    I can’t remember where I saw this quoted statement by Obama, but shortly after his election he said: FDR was right, but he didn’t spend enough”. He isn’t old enough to remember that we had a great manufacturing base unhampered by federal regulations, we mined our own energy and we also had a very favorable balance of trade. His interference actually prolonged the depression. What kicked off the big D was investments being made on margin. In other words, it was loose credit. Even at that money presses were kept at slow speed. Come August, if the debt ceiling isn’t raised, the supercharger will kick in on the money presses. As for riots in the streets, Hitler came to power because of the worldwide recession. People were desperate. How can so many educated idiots be so stupid about our history? Luv your cartoon Greg. Oldguy

    • Greg

      Thank you OG!!
      G

  21. Ralph

    Greg Thanks for watchdog.com I heard the FED charges 6% interest for every dollar they print. tell me it aint true.

    • Greg

      Ralph,
      I don’t know the exact amount but the Fed does charge interest. Thew U.S. could save a lot of money if we just printed our own currency.
      Greg

  22. Art Barnes

    Greg, one more thing,lets not forget the big play (trick) I warned about a few weeks ago the Government has when things go really bad: WAR, WAR, WAR. As the economy goes down the real posibility of war goes up by 2 to 1 in my mind. After the dollar crash one must remember that the bullets are still dry!

    • Greg

      Art,
      Very valid comment my friend!
      Greg

  23. OTE

    QE won’t end until we act on the Fed’s over-leveraging. At better than 50:1 leverage, the Fed is insolvent. Hence as the only financial institution higher (supposedly) is the US treasury, it is time to put the Fed into receivership. Sell off the assets and oh yah, the T-bills the Fed holds? Why we just tear them up.

    To big to fails? Without the Fed, they fail. Once again we sell off the assets and any T-bills held by them we rip them up too.

  24. David Reischer

    Fourth Turning people !!!!! Please wake up already !!!!

  25. Warren Raftshol

    Greg,

    More QE is just giving a blood transfusion to a corpse. The wage share is in a steep dive and it is the strength of the dollar. The wage share dies first. Employment is the very last thing to go. Wage Share

    If inflation were to go to zero, the real interest rate on mortgages, currently at 2.5% would jump suddenly 4% to 6.5% On a 30 year mortgage, a $500K house would suddenly have a present value of $150K. This would cause massive debt defaults which would be beneficial. The price level would take a sudden tumble, and the wage share would be revived.

    These clowns aren’t smart enough to screw things up permanently, unless you count Fukushima and the Gulf Oil Spill.

  26. Bernardo

    The U.S. economy is never going to expnad until we resolve this “little” inconvenience. Greg, any ideas?

    http://theeconomiccollapseblog.com/archives/how-can-america-create-wealth-if-our-industrial-base-is-destroyed-50000-manufacturing-jobs-have-been-lost-every-month-since-2001

  27. michael

    Usa has been in a slow motion crash this entire century, now 11 years old, even still with the heart stopping crashes of nasd 2000, and reit 2008. The USD, Euro and others have been in a ‘managed’ downward spiral in parallel motion, noting the deflation of the purchasing power of wages here and abroad.

    At some point in time, it may be safe and rather poignant to say that the orderly decline will morph into disorderly, when that certain ‘catalyst’ or single straw breaks the camels back. It’s inevitable and it’s coming, just dont know when……..

  28. Ulysses

    The one and only one reason for the current woes of the U.S. is the deplorable state of its education.

    As a foreigner, whenever I see a young American these days, I automatically assume that he knows nothing about math, science, history, geography or even spelling and thinks ignorance is funny and nine times out of ten I turn out to be right.

    In fact, a recent poll revealed that 4 out of 10 kids “hate math”.

    The newsmedia also seems to be more concerned about the football scores of the schools and colleges than their scholastic achievements.

    On top of that, a bunch of idiots called conservatives are trying to replace science and math with religion in the schools and, in this 21st Century, supplant Evolution with Creationism and such nonsense and thereby ruin the futures of the youngsters.

    At the same time, I can tell from first-hand experience, the Asian kids are literally killing themselves to excel in math and science in an ultra competitive educational atmosphere. Is it any wonder then that the jobs are going overseas because that is where the people capable of performing those jobs are?

    In other words, today’s Americans have no idea what kind of competition they are up against.

    Unfortunately this problem can not be solved overnight but will require decades of determined and dedicated effort and national will to remedy and no amount of funny money printing and bookkeeping gimmicks are going to help one iota.

    For whatever it may be worth …

    • Anadixon

      @Ulysses:

      Right you are. Substandard education IS a major underlying cause.

      I’m a foreigner too. I’ve lived in the U.S. twice: first as a child and later as a young parent. So I have personal experience over two generations with the schools there. Both times I was glad to come home.

      To summarize, while I’m sorry for the American people, I can’t say I’m surprised by what’s happening.

  29. jim

    So while politicians take pictures of themselves working out, if they loved their country and family posterity, just perhaps for once they should address the long-term economy instead of worrying about how pretty they look. Unfortunately, history dictates that is wishful thinking. Politicians are elected and thus they will not act in anticipation of a crisis, only when the crisis takes place. Representative government fails every time because the self-interest of the political class is in direct opposition to the self-interest of the people and the nation.

    The QE’s were nothing more then a stimulus to keep banks and biz afloat in hopes of the economy stablizing. Didnt work, when the printers stop the stock market will tank harder then 2008. The people will not accept measures similar to the last go around to solve it. I see the government seizing pensions , 401ks and raising taxes. The people will revolt!!!

  30. James M

    It is fun watching these supposed experts and analysists squirm and tell lie after lie after lie. They are finally trapped in their own web of deciet. Hopefully their ignorance becomes more widley know and accepted among the general public because if this crap goes on for another ten years it will be impossible to fix without massive social unrest and probaly martial law. I got my place in the woods of Vermont lol. Ten years is a very generous guess, might be five or two or tomorrow for that matter. It would be so easy to fix, default, throw all the bums out and start over with the origional US Constitution less the Commerce Clause and the General Welfare Clause. Tie the bastards down with law and rules and take their power to destroy us away.

  31. Davis

    I was talking with a friend about this and he commented that “the bailouts just have to stop. I told him that I understand the sentiment, but I think he missed the point. It’s not a matter of simply stopping the bailouts. They are just the surface camouflage that disguises the underlying agenda of powerful banking institutions that use debt as a lever to dismantle the very concept of a sovereign nation that is not beholden to them. And if they can get us to foot the bill for our on destruction all the better for them. There is nothing in the Constitution that says our money must be a debt instrument of a private bank. Alexander Hamilton is screaming out from his grave that he had the solution 225 years ago.

    • Greg

      Thank you Davis!
      Greg

  32. Ambrose

    Greg,

    I just love to read all the intelligent comments on your website. They are QE to my brain and they are quite addictive.

    Some strategies we learned from Big Corporations that may apply to the Fed. In order to solve the national debt problem, the Fed can take one or more of the following actions:

    1) Outsourcing – it is quite obvious that the Fed has no clue on controlling the debt or fixing the economy. It is time to get outside help. How about hiring some Canadians to fix our banking system? (According to reports by the World Economic Forum, banking in Canada is widely considered the most efficient and safest banking system in the world.) How about hiring some Germans and learn how to keep our jobs at home and improve our GDP? How about hiring some of the readers from USAWatchdog as financial advisors? I bet they will do a better job than Tim and Ben. Send Tim and Ben to the unemployment line.

    2) Acquisition – anyone wants to buy a country full of debt? Any bidder? Auction on eBay?

    3) Merging – merge with another country and consolidate the debt.

    4) Bankruptcy – just like Argentina went bankrupt in 2001 or Iceland in 2008. The US will default on its debt.

    5) Craziest Idea – hire the best hacker(s) in the world and hack into every computer in the world. Remove any trace of national debt and reset the national debt clock to zero.

    P.S. Before we privatizing social security, medicare, jails, …, etc., we should privatizing White House and Congress since our “public servants” are no longer serving the American public.

    Ambrose

    • Greg

      Amborse,
      Bravo! I especially love this line! “Before we privatizing social security, medicare, jails, …, etc., we should privatizing White House and Congress since our “public servants” are no longer serving the American public.”
      Greg

  33. David Conrad

    Greg,

    A dire, but unfortunately spot on post. If Sinclair is right (again) and gold goes to $12,000 an ounce, what will the U.S. dollar be worth? I guess wallets will start taking the form of wheelbarrows.

    (Can you get a Gucci in one of those)?

    Keep up the outstanding work. America needs you.

    • Greg

      Thank you Dave my friend!!!
      Greg

  34. mrRich

    watch for a new requirement that a percentage of every pension plan be used to purchase govt treasuries. it will have a patriotic marketing campaign ala war bonds marketing.

  35. Tom

    Greg, I beg to differ.
    More printing money will make it worse.

    The lower the US$ goes the higher OIL & FOOD go with more potential
    riots and demonstrations worldwide.

    The day that OIL no longer trades in US$ will start to approach quicker and quicker as OPEC gets more serious about using SDRs, euros,
    and/or other currencies. Rubles and yuan already used.
    BRICS agree.

    I don’t know what will happen, but I do know that the end result will be a weaker and weaker USA.
    By 2016, CHINA will be No.1, and the days of once mighty USA are coming to an end.
    Who’s to blame?
    BANANA BEN?
    Sir Greenscam?
    The stock market?
    Housing?

    Hard to say, but the future generations won’t care – USA will continue to decline.
    Smart Americans should leave the country, if they already haven’t.
    Just like Jim Rogers did.

    Strongest currencies for the next 2000 years:
    CHF
    C$
    A$/NZ$
    Scandinavian krones
    and respective countries

    This is how I see it:
    FAREWELL USA or FARAWELL US$
    EUROPE (EEC) not in much better situation.
    Both are going down long-term.

    I wonder who the winner of the “2012 American Idol” will be?
    Does it even matter?

    • Greg

      Tom,
      Thank you for your comment. It was sharp and hit the bull’s eye.
      Greg

  36. michael

    There has been so many ‘calms before the storm’ and warnings to get ones house in order. Taking savings out of cash and the banking system and put into precious metals should have been a work in progress now this decade. One cannot, nor should depend on govt for subsistences, just ask Athens!

  37. galaxy tab gold

    Greg, Jim S. didnt miss the price by much. Thanks for the real news. The office i am working at is closing and some asked me what they should do with their 401-k. When i told them, she looked shocked and asked me why. I told her. She said that i had a really negative view of the future. I asked her if she thought it possible for the government or anyone else to spend their way out of bankruptcy. She said, “Do you really think we are headed that way?” I laughed. She came back the next day. She did a little thinking and some research. I think she understands now.

    • Greg

      galaxy tab gold,
      He really did not miss the price by much, especially when you consider he made his $1,650 call in 2002. If he is only half right (and I really think he will hit the bull’s eye here) gold is going to go way up in the next few years. I would never bet against Mr. Sinclair, especially when it come to gold. He is one of the very best out there, and has a track record to prove it.
      Thank you for your comment.
      Greg

  38. Daryl B.

    Truly it is sad what an oligarchy of government elitists have allowed to occur. The government is bogus and fiat money is bogus! When I take a federal reserve note out of my billfold, it makes me very sad to see the pictures of the great men who sacrificed so much for our nation. I know they took the Constitution as their compass and guide, it is a shame others lacked the dignity and courage to do so.

  39. boatman

    at a 25 bil$ a month rollover rate, QE2 still lives without a fed expansion….without real financial restructuring and while just digging the hole deeper,QE3 kicks the can down the road further.

    my disclosure: long phys. gold….everything else is a trade

    best bank analyst in the world chris whalen on qe3:

    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/6/4_Chris_Whalen.html

    • Greg

      Thank you Boatman for the comment and content.
      Greg

  40. sagaer majithia

    Hi,

    There is just one solution ….tax companies and not people and companies that outsource good american jobs to countries like India and China and let the tax be more than 200% ( more than what they can save by outsourcing) let all those jobs come back like a flood of jobs and we’ll see how the american economy does not recover.

  41. Free Legal

    Bernanke is going to need to start QE 3 before the Presidential Election in November. Bill Gross at PIMCO suggested yesterday that the public sector needs to step in as there is not enough growth out of the private sector. I am no Keynesian. However, Gross is correct. I am not arguing what the Federal Reserve should do but what they will do. The Federal Reserve will surely print because without printing this economy will roll over.

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