Let the Fed buy up U.S. government debt, thereby creating artificially low interest rates and weakening the dollar. What could possibly go wrong?
Well, rather a lot, as Sarah Palin pointed out last year. Notwithstanding Obama’s absurd public hunt for “speculators”, it is Ben Bernanke’s quantitative easing policy that has contributed materially to domestic inflation in food and energy prices. Well played, Ben!
Gold and silver are way up, too, at least partly because investors are getting increasingly skittish about U.S. economic policy and the by-now-completely-obvious fiscal irresponsibility that our political leaders have been engaging in for decades (aided and abetted by we the people, who keep electing these witless wonders). My guess is that you won’t see gold drop below a thousand dollars an ounce unless Obama is tossed out of the White House in 2012 – maybe not even then, unless Congress gets serious about entitlements reform.