US imports zeros from China to count NEW dollars
If by now you aren't convinced that our lives are being dictated and manipulated by that little green bill, this should make it crystal clear:
M-3 has been launched into outer space, up another $56.3 billion last week, up $92.4 billion over the past two.WOW! That's a BIG figure and according to Fx.street, it's lifting the markets. But WHY? The folks at Fx-street posit this educated speculation:
The raw, non-seasonally adjusted, figure is up $293.3 billion over the past 12 weeks, on a pace to add 1.2 trillion in money to the economy.
What if Iran goes through with its threat to sell oil for Euros instead of U.S. Dollars? . . . So, you sell the Dollars you are holding for Euros.Now, let me get this straight. They print dollars from THIN air, then buy everything in sight?!! Someone, please, tell me I'm missing something!
Whenever anything is sold en masse, its value drops. This means less demand for Dollars, which means the Fed will not be able to print excessive amounts of Dollars without further driving down the Dollar's value. There would simply be too much supply.
Right now, the Fed can print all the Dollars they want because the demand for Dollars has been on the rise, especially as the cost of oil has risen. In other words, lately it has taken more Dollars to buy oil, so the demand for Dollars has been up. Again, this extra demand has allowed the Fed to print all it feels like with little consequent damage to the Dollar.
However, if the Dollar were to tank - and the Iran oil Bourse should push the Dollar in that direction - it puts pressure on Treasury Bonds and other U.S. financial assets to fall as well, since they are denominated in a declining-value currency.
In this event, the Fed would have to step up its buying of U.S. financial assets to lend support to these asset prices - to stabilize U.S. markets. In other words, the Fed would have to monetize the U.S. Treasury's debt, and also monetize equity markets (be the buyer that keeps prices from falling).
This would take so much fresh money that the Fed would need to create it in secret. Thus, they would have to announce that they are no longer going to transparently reveal the level of the money supply, but will hide it. [haven't they anounced that, already?!!]
The alternative is to punish Iran for - and make no mistake about this - effectively declaring economic war against the United States.
This is in line with what Bernanke recently advocated the Fed should do:
"...whatever it takes to combat deflation, including the buying of long-term government bonds, stocks, real estate, and even consumer goods, such as automobiles, as well as his reference to dropping dollar bills from helicopters, which earned him the nickname "Helicopter Ben."
My guess is that they will stop at nothing to maintain CONTROL. Hold on to your assets; this is going to get ugly.