"Our duty is most distinctly not to monetize - or even be perceived as monetizing - the debt of fiscally imprudent government. Throughout the history of nations, monetizing the budgetary excesses of governments has proven to be a direct path to economic perdition. Having already peeked inside that door, I feel strongly that we must now shut it, lock it and throw away the key."
Dallas Federal Reserve Governor Richard Fisher, from a speech entitled "Is America's decline exaggerated or inevitable" on April 8, 2011.
To QE or not to QE is the question. Save the date, because quantative easing part II ends on June 30th of this year. With regards to "having already peeked inside the door" of debt monetization, the door has been wide open with liquidity sloshing around the global financial system like mad. Just look at silver, dropping to $39.50 before violently popping to a new 31 year high of $42.50. These $3 price movements are incredible now, but if profligate government spending continues in the manner that it has, not only will we see $3 daily movements but possibly even $10 intraday moves. Lets hope that will not be the case.
This Sunday on CNN, James Baker was a host on Fareed Zakaria's show. During the interview, he stated in stark terms:
The United States of America, if we didn't have the dollar as the de facto reserve currency of the world we'd be greece.
I mean, we are broke, bankrupt, really bankrupt.
Wow. Those are some disturbing comments from a former treasury secretary and bigtime government official. The two quotes above come from highly esteemed government officials, not some "cook" blogger or website. Of course the cook bloggers have been warning about national bankruptcy and insolvency for years, but slowly these words are being uttered by those in the high echelons of power. As the fiscal and monetary continues to deteriorate I expect more statements like these to come out. And you can expect me to report them.