Quick snippet of brain food and a prediction from George Ure over at Urban Survival:
The Plan: We Buy Our Own Debt?
Ben Bernanke’s recent comments that the Fed will ‘Deploy all tools‘ to push along the economic revival plan may, or may not, be read as a ‘good’ thing. Legendary commodities trader Jim Rogers tells Bloomberg that among the ‘all the tools’ might be the Fed buying Treasury securities which, he figures, will delay the inevitable.
Snake Eats Its Own Tail, Or…
All of which might work for a while, just like the shoemaker buying the all the bread the baker can bake, while the baker buys all the shoemaker’s shoes. The problems arise when, at the end of such a circular reference, the shoemaker or baker wants to sell product to a third party having bid up prices amongst one another.
It’s then that the truth slips out, that the circularly referenced deal was a sham, and prices of shoes and bread collapse in a heap. Or, if we go down that slippery slow of buying our own debt from ourselves, how that will be viewed by the only folks that are keeping the world together right now: China.
That’s when our currency collapses, China becomes the world economic superpower and we drop to nth place as a third world country. But not to worry; the linguistics on this indicate it won’t get underway until [mid] May of this year and the workout will run from late summer out through 2010 and beyond.
George is not the only one predicting a dollar collapse in May. Consider the Think Tank’s 2009 Predictions.