Industrial Insight

inflation?? | December 21, 2011

http://online.barrons.com/article/SB50001424052748703911604577100333787498196.html?mod=BOL_hpp_dc

SATURDAY, DECEMBER 17, 2011

Next: “Face-Ripping” Inflation?

By JACQUELINE DOHERTY and ANDREW BARY

But the QB duo is convinced that central bankers will start printing money to pay off public debts and keep the banking system solvent. They expect a managed global devaluation of all major currencies in six months to a year. It could be orchestrated through the International Monetary Fund, or the markets might require a gold-based solution, applied by the central banks.

QB’s partners worry that the system’s base money (bank reserves at the Federal Reserve and currency in circulation) is dwarfed by the claims on it. For every dollar of base money, there are $5.00 worth of bank deposits, including checking and savings accounts and time deposits. So, if everyone demanded the return of their deposits simultaneously, the bank could pay only about 20 cents on every dollar owed, Quaintance says.

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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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