The inflation in the monetary supply brought about by QE2 will begin to work its way into asset prices in the next 6-18 months.
Casey is correct that this is likely to spike real inflation to 20-40%.
Can you imagine what QE3 will do when it works its way through the economy?
Inflation in the next few years is likely to start running ahead at 20% or 30% or even 40% per year or more and that’s going to devastate the prudent people in this country and perversely it’s going to reward the imprudent ones, the grasshoppers in our society that are deeply in debt because it will wipe their debt out. This is all quite perverse, very bad.
In South America where this (hpyerinflation) has happened in the past to other countries, it’s very bad in the country when they destroy the currency, but the rich people, the smart people all have significant wealth outside of the country. The rest of the world looks at it and they bring capital in to take advantage of the bargains and they invest.The problem is when the US government destroys the dollar in the next few years, very few Americans have diversified outside of the United States, so they are not going to be able to bring anything back in to rebuild. The US dollar is the savings vehicle for most people around the world, so it’s going to turn out that billions of people around the world are going to be wiped out when the dollar is destroyed, not just the Americans.
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