Quantitative Easing explanation

Funny and probably informative for anyone unfamiliar with the economy.

US debt ceiling up again to $12.4T

It’s a bit disconcerting to learn “The bill permits the Treasury Department to issue enough bonds to fund the government's operations and programs until mid-February. The Senate will vote again on the issue Jan. 20” Yahoo News). At this point, the lack of any debt-reduction proposals has become sadly expected.

LAURIE KELLMAN (AP) then went on to say “Obama must sign the measure into law to prevent a market-rattling, first-ever default on U.S. obligations.” Given that Bernanke could literally create as much USD as he wants, American treasury debt would always make good on its obligations, the risk lies in speedy inflation.

So why would the Associated Press plant fear of default into the readers? It’s to probably rally support for the (reckless or intentional?) excessive borrowing by the few people who run American congress. How will this end? Badly I bet.

banks put 63 percent of their new cash into euros and yen

Noticed this at the NY Post,

"

Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital. The dollar's share of new cash in the central banks was down to 37 percent -- compared with two-thirds a decade ago. 'Bernanke's other choice is to keep rates at zero, print even more money and sell more debt, but we'll see triple-digit inflation that could collapse the economy as we know it.'

"

The above article generalizes the immediate past, with no empirical evidence of likelihood for continued actions for the immediate future. And, the coming destruction of USD backed credit instruments still makes inflation/deflation immediate future uncertain.