Monday, October 11, 2010

Dollar Devaluation, Next Phase

The value of the USDollar depends on a few factors, one of them being 'inflation.'

Inflation occurs when there are more and more dollars chasing goods. And it appears that Bernanke's Federal Reserve is going to print up another boatload of dollars.

The weak employment report all but guaranteed QE2 will be announced on November 3rd. The "whisper" number is for an announcement of an initial $500 billion in purchases of long term Treasury securities over the following six months.

"So?" sez youse. "Fed holds T-bonds, whassa diff to me?"

If you purchase petroleum products--including fuel and plastic goods--or anything made with corn, soybeans, wheat, or oats, you'll become very familiar with "the diff" in the near future.

Notice that Ticker's price-charts on those food commodities show the rises beginning around July of this year. That's approximately when rumors of QE (quantitative easing) 2 (the second round) began to surface.

So far, petroleum has held steady around $75-$80/bbl.

So far.

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