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<p>[QUOTE=&quot;InfleXion, post: 1705224, member: 29012&quot;]QE1 and QE2 were a huge boon to metals on speculation of inflation expectations, also because they were a huge shot in the arm at once as opposed to an open ended IV like QE3 and QE4 are. It wasn&#039;t that inflation suddenly jumped up because of QE, although that will be the end result.</p><p><br /></p><p>The inflation is still looming unless they destroy all that currency. The reason it hasn&#039;t hit yet is because there is no velocity on all those dollars, which is because the too big to fail banks are sitting on it. They need it to keep their balance sheets solvent, so it&#039;s not being spent. It won&#039;t result in inflation until it hits the market. Velocity is what causes price inflation. Inflating the currency supply only leads to price inflation IF those dollars are spent. The word &#039;inflation&#039; is ambiguous without defining what is being referred to - price or supply. Price inflation can happen without supply inflation if people are spending a lot and turning dollars over quickly enough.</p><p><br /></p><p>The only way inflation won&#039;t eventually happen is if all the QE dollars are destroyed before being spent, meaning the banks would have to take massive losses after all that free money (GAO audits show $16 trillion in SOMA loans were given out along side of TARP and need not be repaid, and who knows what else is going on under the table since that took a couple years to come out). That just won&#039;t happen since the banking business model is dependent on having those QE dollars, without which the counter party risk chains would fail as they lose their ability to &quot;make markets&quot;, lose trust in each other, lending stops, and the whole thing crashes under the weight of double-triple digit leverage all based on the same underlying asset (hundreds of trillions of derivatives / credit default swaps).</p><p><br /></p><p>So it&#039;s a waiting game. It will either inflate eventually as those dollars hit the market (only going on now to a very small degree), compounding velocity, or if not then all paper/electronic assets will go to zero as the leverage unravels and we will go back to a barter system temporarily, after which only tangible assets will have value, the dollar will be replaced as the USG defaults on its debt, and people will measure value in gold and silver once again so the price will be irrelevant, and it will just be a matter of how many ounces you acquired before then.[/QUOTE]</p><p><br /></p>

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