Andy1234

O Canada (Part II): There's Gold in Them Thar Hills - and Plains

I think Canada is also a great spot to be. I am invested in their REITS, energy trusts, and mining companies.

The Case for Precious Metals Is Only Getting Stronger

My question is this.

Money is released to the public through loans correct? Or through some government program of some sort.

Is it possible that the housing crash (reset of Alt-A and Option ARMS) will delay the hit of inflation? Wouldn't the destruction of these loans/banks/etc just offset any newly created money in the short term? The banks know they have a lot of deliquent loans...they know the foreclosures coming....and their reserves are increasing....at a too slow of rate anyway.

So how is this money that the fed is creating going to hit the streets if all the banks are hoarding it? Would the credit loss be greater than the new money created?

The fed cannot raise interest rates as this will create further inflation UNLESS they can get people to buy their bonds...otherwise, since they are on basically adjustable rate debt themselves....they would just be increasing the interest payments on their own debt.

I agree with everyones view long term....but not sure about short term (before 2012) because of a deeper housing crisis.