Watch China and Japan. They hold the monetary hammers.
If they decide to teach us a lesson about running on perpetual gub'mint deficits and start selling the reserve dollars and US debt they hold, then the dollar will collapse and gold will rise in response. US interest rates will also increase markedly in that scenario.
The first time they start dumping their holding the rest of the world will join in for fear of the losses they will take on their own dollar reserves.
While it may take a while for all the freshly printed money to show up in price levels, the collapse of the dollar can be engineered on very short notice by foreigners.
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Watch China and Japan. They hold the monetary hammers.
Nov 14 11:03 am
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All Comments by Smarty_Pants »Is Hyperinflation on the Horizon? [View article]
If they decide to teach us a lesson about running on perpetual gub'mint deficits and start selling the reserve dollars and US debt they hold, then the dollar will collapse and gold will rise in response. US interest rates will also increase markedly in that scenario.
The first time they start dumping their holding the rest of the world will join in for fear of the losses they will take on their own dollar reserves.
While it may take a while for all the freshly printed money to show up in price levels, the collapse of the dollar can be engineered on very short notice by foreigners.