Jim Willie on the real truth behind QE3 and how it affect Silver prices

I just came across this interview with Jim Willie starting at 22:00 minutes. He seems really sharp and spot on, but I wanted to get some other people's feedback.

[video=youtube;nC_Zb5PEAZ4]http://www.youtube.com/watch?v=nC_Zb5PEAZ4[/video]

Thoughts?

I agree with him and think this will push silver prices higher.

 

Log in or Sign up to hide this ad.

I like Jim Willie, but I don't always agree with him even though I often do. He incorrectly called Operation Twist QE3 when it came out. OP Twist was not QE, it was selling Treasuries to buy other Treasuries. QE is creating new money for the purpose of buying Mortgage Backed Securities and/or Treasuries.

This particular interview is also wrong about QE3 being $40 billion per month. It's right that that amount is going into Mortgage Backed Securities, but an additional $40 billion per month is also going into Treasuries. So it is $80 bn/mo indefinitely - until unemployment gets down to 7%. I saw on the news this morning unemployment is now in the high 7's. So we could be closer to QE3 ending than many expect, but I also don't think that number will be sustainable without pumping money into the system.

Regarding the rest interview, it is good info IMO. Sterilization is an important topic. If they had money on hand to offset the money printing in order to sterilize it then they wouldn't need to print money in the first place. Apparently the Fed is using existing Treasuries they own for this sterilization, but that is a short road. As the majority holder of US debt they can't realistically become a net seller. Even if they did do this they will still have to continue buying more than they are selling. So either way it's monetary expansion. It's just a shell game.

 

I have read a lot of Jim Willie, he's got the right idea but he's just a little too extreme about it. still the trend is what it is, more fiat means higher PMs.