- Ray Dalio: “We Are On The Brink Of A Terrible Civil War”
by Tyler Durden, https://www.zerohedge.com/
It was over a decade ago that we first warned the Fed’s unconstrained monetary lunacy will eventually result in civil war, a prediction for which Time magazine, which back then was still somewhat relevant, mocked us. This is what Time’s Stephen Gendel said in October 2010:
What is the most likely cause of civil unrest today? Immigration. Gay marriage. Abortion. The results of Election Day. The mosque at Ground Zero. Nope.
Try the Federal Reserve. Nov. 3 is when the Federal Reserve’s next policy committee meeting ends, and if you thought this was just another boring money meeting you would be wrong. It could be the most important meeting in the Fed’s history, maybe. The U.S. central bank is expected to announce its next move to boost the faltering economic recovery. To say there has been considerable debate and anxiety among Fed watchers about what the central bank should do would be an understatement. Chairman Ben Bernanke has indicated in recent speeches that the central bank plans to try to drive down already low interest rates by buying up long-term bonds. A number of people both inside the Fed and out believe this is the wrong move. But one website seems to indicate that Ben’s plan might actually lead to armed conflict. Last week, a post on the blog Zero Hedge said … that the Fed’s plan is not only moronic, but “positions US society one step closer to civil war if not worse.”
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The problem is that the Fed directly sets only short-term interest rates. And they are already about as close to zero as you can go. That’s why Bernanke has been talking about something called “quantitative easing.” That’s when the Fed basically creates money to buy the long-term bonds that it doesn’t directly control and drives down those interest rates as well. That should further reduce the cost of borrowing for large companies and homeowners. Some people are calling this “QE2” because the Fed made a similar move during the height of the financial crisis when it bought mortgage bonds. (See photos of the Tea Party movement)
Not everyone agrees this is a good move. In fact, a number of presidents of regional Fed banks, not all of which get to vote at Fed policy meetings, have recently come out against Bernanke’s plan. Some say it sets bad policy. Others think it will stoke inflation, which might be the point. Few, though, have warned of armed conflict. Here’s how Zero Hedge justifies its prediction of why the Fed’s Nov. 3 meeting will lead to violence: