Dear Money & Crisis Reader, Yesterday I noted a major problem for the U.S. That problem is the U.S. Dollar’s ($USD) strength. The greenback simply refuses to break down this year. And this is despite the U.S. carrying a $3 trillion deficit and the Fed running a $120 billion per month ($1.4 trillion per year) Quantitative Easing (QE) program.  With the U.S. now over $28 trillion in debt, this is a major problem. You see, a big part of the Fed’s scheme is to inflate away the U.S.’s debts. What this means is that by devaluing the $USD, the Fed ensures that the U.S. pays back lenders with dollars that are worth much less. This is the same scheme overly indebted nations have used throughout history, whether we’re talking about Weimar Germany, or Argentina, or Greece, etc. However, with the $USD refusing to move lower, the Fed is now in a quandary. It wants the $USD to weaken, but it doesn’t want an inflationary storm that would cause bond yields to soar. (Higher bond yields mean greater debt payments for the U.S.) So, what is the Fed to do? |
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