by Dave Kranzler, Investment Research Dynamics:
“The housing market is 100% a function of the Fed’s money printing. Half the money the Fed printed, $2.2 trillion, went directly into the housing market.”
Analysts and financial media meatheads look at the $4.5 trillion created by the Fed and truly believe that it wasn’t money printing because it’s “backed” by Treasury bonds and mortgages. But this is pure ignorance. Not taken into consideration is the amount of credit and debt issuance enabled by using the $4.5 trillion as the “reserve capital.” It’s fractional banking on steroids.
As the U.S. financial system reaches its limit on the amount of debt that can be serviced from the current level of wealth output, what happens next? We’re already seeing what happens in the housing market per the fact that the homebuilder stocks are in an “official” bear market, with some of them down over 30% since late January.
Then what? The Fed will have to print multiples of the original amount it printed or face systemic collapse. At that point the precious metals sector will soar beyond anyone’s imagination at this point in time.
Phil Kennedy (Kennedy Financial) invited me to discuss these issues on his podcast. Phil’s podcasts blend truthseeking, facts, humor, humility and sarcasm. It’s well-worth the time spent to listen: