The “I” word is… inflation. If a serious inflation cycle is beginning, a lot is going to change for the fiat-oriented citizens of the United States, and not in a good way.
That the debt is unpayable may be obvious, but the endgame is not obvious at all. The Fed keeps printing, but no default. How come? Is a simple "reset" coming?
The weaponization of the US dollar to bring the rest of the world to heel is backfiring. Only a serious change in course – toward non-interventionism and non-aggression – can avert a disaster. Time is running out.
We have entered into a very treacherous market environment, which will likely last over the coming two months. And, I do not see the next multi-month trending market move setting up for several months.
The weightiest piece of evidence about Basel 3 is the astounding panicked protest issued a month ago by the LBMA and the WGC, a protest directed to the Bank of England's Prudential Regulation Authority, opposing implementation of Basel 3 in the UK.
The Fed is walking a thin tightrope between fighting off financial asset deflation (a stock and bond market crash). To do this it needs to continue printing enormous sums of money.
Any way you slice it, deleveraging is how this bubble will end. "Inflate-or-die" policies have just about run their course and will require only a shove from a bear market to go over the cliff.
The longer the Fed waits to remove its “accommodation” to the market, the more it will have to pull a hard stop when it becomes clear inflation has the upper hand.
