QE, Inflation, Deflation, and What is Money?

Amazingly, just today President Obama declared attorney General Holder would head a Financial Fraud Enforcement Working Group to investigate speculative manipulation of the oil market. This is nothing but a red herring to appease the ignorant masses. Obama’s treasury secretary, Tim Geithner, and the head of the Federal Reserve, Ben Bernanke, know perfectly well that the root cause of the inflationary trend now punishing the world is from their own monetary strategy.
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maybe the meek will inherit the earth. they may be the only ones left.
 
Centralized socialism is doomed to failure. The socialists get too ambitious and indeed begin confusing money with power and eventually it all collapses into centralized state control and rationing of all things. Do we really have to go there?

Gut the federal government into budgetary equilibrium. Let the states pick at the left over carcass for bits of social justice programs they want to reimplement and fund themsleves.
 
Nathan Martin, a blogger with a similar and perhaps better take than mine, commented on the subject this morning.

Martin included what I called hard currency, or cash, as part of credit since it originates through the issuance of debt. In my mind there is a distinction because the currency has already been earned whereas the credit has not yet been earned and can contract. He then talks about "other" money - derivatives and margin - as the greatest supply of money well into the hundreds of trillions. Unfortunately for us, this amount cannot be measured as the majority is off the books, and unregulated. It is believed that just 4 banks hold over 90% of this total!

Martin then talks about a 3rd type of money: Sovereign money. This is debt free money issued by the government. The US no longer issues sovereign money, but there were times in the past that we did. Martin outlines what he believes is the monetary system that provides the best chance of success. I agree with his conclusions. The article is pasted below.

In reply to:
 
The growth in money is confined to the financial sector; not the general economy. Hence wages are stagnant. The noney is leveraged by purchasing stocks, precious metals, and commodites such as oil futures and grain futures.
 
From what I'm reading is seems as though we are damned if we do and damned if we don't. Is there a way out of the mess?

"The dialing back of the Fed’s monetary machinations increases the possibility that interest rates will need to rise in order to attract buyers in sufficient quantities to fill the gap. And if there’s one thing we know, it is that rising interest rates would be devastating to an empire of debt such as the United States circa here and now."

"This steep downward slope of the dollar’s trend line over the last year begs for the Fed to attempt something to slow the dollar’s descent. Were they to signal a continuation of the same level of monetization now underway, past June, can anyone doubt that the dollar’s steep fall would only worsen, risking even collapse?"

To my reading this seems to say that if we continue monetization we are hosed with a potential dollar collapse but we are also hosed if we don't monetize because that leads to higher interest rates.
 
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