Thursday, March 19, 2009

Denninger on Bernanke’s Suicidal Tendencies…

Here is Karl Denninger’s take on the possible outcomes of Bernanke’s stunt yesterday. It is sobering, and I believe in the realm of possible outcomes. It is the result of the negative spiral I mentioned where people sell their bonds and treasuries to the only bidder left – the U.S. government.

He is correct that wages cannot keep pace with the onslaught, as I’ve mentioned because we are in an “open” system where our capital and international capital is free to leave. Thus, the result may be the opposite of the hyper-inflation most people expect. He explains this well, make sure you read this ticker.

Bernanke Inserts Gun In Mouth…

Yes, his scenario is possible. Yes, if you have the means to prepare, consider it a hedge.