The FED's New Time Bomb

A rising tide lifts all ships. It seems we are seeing something we have already seen before. Gold, stocks, Bonds are all rising in sync with one another as the US dollar takes a bath. The same lax monetary policy that fueled the stock bubble of the late 90s and the housing disaster just recently is in effect once again under the disguise of stimulus. Now with a 0% interest rate policy we have take Japan's place as a funding currency.

How many times can we make the same mistakes. It is inconceivable that a crisis created from too much debt would find a solution to the problem using, yup you guess it, even more debt. This is beyond asinine. Just look at Japan did it work? Absolutely not!

Bernanke has stated that the FED intends to withdraw its 2 Trillion plus dollars of stimulus from the US Bond Markets and MBS markets come October 3, 2010. That is literally D day if they actually follow through on this threat.... Yes I call it a "threat" because thats what it is.

They are filling the void left by the destruction of the shadow bank market and when and if they withdraw this support and if the original structure has not been restored there will be a vacuum created. That sucking sound you will hear will be the last breathe of life being sucked right out of this country's already strained financial system as Mortgage Back Securties and US Bonds tank and rates skyrocket.

CRISIS INDEED!!!

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Shanty towns and tent cities in Southern California why isn't this on prime time news....I wonder. California is the nations largest economy and where they go we all tend to go to varying degrees. I am not saying that in Florida this scenario looms on the horizon necessarily, but if this is the fallout from our current mortgage crisis in the nations hottest housing market it warrants a certain amount of attention. What does this really say about the "American Dream?"