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The Fed prints more than $600 billion and bank accounts go up by $60 billion. New money is sloshing around and will cause prices to go up in the next few years.

The normal end game for fiat money is that the central bank buys bonds with new money so fast that it is foolish for anyone else to hold onto bonds. The government usually pushes the central bank to buy bonds because they need to sell lots of new bonds to pay off the bonds coming due as they are spending nearly twice what they get in taxes. As more and more people get out of bonds the central bank buys more and more. You get a positive feedback loop or death spiral. It seems that the Euro is headed down the normal hyperinflationary path over the objections of the Bundesbank. These "desperate attempts to save the Euro" are exactly the way to destroy the currency. They are temporarily saving the governments of Spain and Italy at the expense of the currency down the road.

The US has seemed on a hyperinflationary track for some time. Basically the debt gets over 80% of GNP and the deficit gets over 40% of spending and the central bank becomes the main buyer of government bonds. Looks more and more like the Euro is headed down the hyperinflationary path as well.

http://pair.offshore.ai/38yearcycle/#hyperinflation

John, this isn't savings. There isn't any money in the system that banks don't create themselves. The Fed creates money for banks to solve their liabilities in cash, much of which circulates, but most of which flows between banks to solve interbank liabilities. The banks must make new loans or they can funnel excess Federal Reserve cash to the Fed to buy bonds, from which the government writes checks, recreating the money in accounts. Only debt repayment or withdrawal from the bank accounts and putting the money in a matress reduces thiese deposits. We are looking at a new debt spiral, again created by the government. All the money is free

21-Aug-12 World View -- Europeans debate next desperate step to try to save the euro

PKK terrorists kill 8 in huge blast in Turkey near Syrian border

[i][url=http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e120821#e120821]** 21-Aug-12 World View -- Europeans debate next desperate step to try to save the euro[/url]
** [url]http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e120821#e120821[/url][/i]



Contents:
PKK terrorists kill 8 in huge blast in Turkey near Syrian border
Europeans debate next desperate step to try to save the euro
U.S. banks double investments in Treasuries as deposits explode


Keys:
Generational Dynamics, Turkey, Kurdistan Workers' Party, PKK,
Syria, ECB, Bundesbank, Angela Merkel, Germany,
Greece, Italy, Spain