The Fed Leads By Deception

An excerpt from Bob Chapman's weekly publication.

August 10 2011: The Fed has not solved any crisis, no real debt solution in place, merely a palliative solution, Gold gaining power, reinstitution of Glass-Steagall Act, no end to what the government is capable of spending, economic collapse is on the way, nothing to stop it.

One thing is for sure the Fed leads by deception. We have seen the act since 2007 when it supposedly set out to solve the credit crisis. Quantitative easing and zero interest rates may have provided the Fed with additional time, but they did little to solve the long-term problems, or to help bring about recovery. In fact, these measures insure that we will have future problems, particularly with inflation. Those who understand what the Fed is up to also understand that the Fed has little credibility and its reputation may have been totally lost. The recent debt extension served to help the great spenders, but we see it as a prelude to a lowering of the US credit rating that could cost an additional $300 billion a year. That does not sound like any kind of a victory to us. The flipside is more debt, higher inflation, a falling dollar and higher gold and silver prices. That means more exports but more expensive inflationary imports. Such policies make our projection for 14% inflation this year very feasible in spite of $2 trillion lying dormant in bank vaults or at the Fed. Sooner or later those funds will be released and when they are monetized there will be a liquidity explosion that will catapult inflation.

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