THE BERNANKE CASH TSUNAMI WILL BE AN INTERESTING STUDY...
FOR THE MONEY TO CAUSE NORMAL INFLATION IT WILL HAVE TO GET INTO THE REAL ECONOMY SOMEHOW...
USUALLY THIS IS DONE BY WAGE INFLATION...BUT WITH THE US JOB MARKET NOW NEARLY ALL SERVICE JOBS...WAGE INFLATION HAS BEEN "WHIPPED."
WE "SOLVED" THE LOW WAGE PROBLEM WITH "THE BUBBLES" OF THE 90'S AND BEYOND...
STOCKS BECAME A SOURCE OF INCOME...AND THE HOME ATM...WAS HOW PEOPLE SPENT MONEY UP UNTIL THE MIDDLE OF 2008...
SO HOW WILL THE BERNANKE MONEY TSUNAMI GET INTO THE REAL ECONOMY NOW...
MY HUNCH IS THAT THE MONEY WILL STAY WITH THE BANKERS...AND BE LENT OUT TO WALL STREET AND OTHER WEALTHY TYPES...FOR COMMODITY SPECULATION...
MONEY...LIKE WATER...WILL FIND A WAY.
AND MONEY...LIKE WATER...WILL TAKE THE COURSE OF LEAST RESISTANCE...
I DO NOT SEE WAGE INCREASES AS BEING THE WAY THIS MONEY HITS THE ECONOMY... OR A REVIVAL OF THE HOUSE AND STOCK BUBBLES.
RATHER...THE "OLD WAYS" OF FINANCIAL SPECULATION...THAT WE ESTABLISHED IN THE POST-RAY-GUN ERA WILL BE USED...
THERE WILL VERY LIKELY BE A RUSH INTO COMMODITES LIKE GOLD...AND OMINOUSLY OIL.
REMEMBER, WE HAD A PREVIEW OF COMING ATTRACTIONS IN THE OIL MARKET SUDDENLY LAST SUMMER...WHEN GAS WENT TO $4 PER GALLON...
AND THE LOCAL ECONOMIES SNAPPED INTO THE PRE-NATAL POSITION...
UNTIL THE BANKING COLLAPSE SHOCKED THE COMMODITIES PLUNGE LAST FALL...
SIMPLY PUT...A FAST $100 COLLAPSE IN OIL ...IS FAR FROM NORMAL...EVEN IF IT IS "GOOD."
BUT, IF OIL FELL $100 IN A FEW MONTHS ....IT CAN REVERT TO THE PATTERNS OF LAST JUNE AND JULY EQUALLY AS FAST...
IF HYPER-INFLATION COMES TO THIS ECONOMY ?
IT WILL NOT COME IN QUIETLY BUT QUICKLY....JUST LIKE THE GAS DEBACLE SUDDENLY LAST SUMMER...
MONEY LIKE WATER FLOWS DOWN HILL...TAKING THE COURSE OF LEAST RESISTANCE.
