Kapitalcon cited my post discussing the $223 billion dollar US Federal deficit in February, and then went further to predict QE III:
Important to note is the Federal Reserve’s recent announcement that it may have to begin its third round of QE in response to sky-rocketing oil prices. Atlanta Fed President Dennis Lockhart stated at the National Association of Business Economics in Arlington that “If [the rising price of oil] plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation.” As oil increases, so too does the cost of most, if not all, goods and services. This includes anything that requires petroleum in the production process, not to mention increased transportation costs for moving the product to market. Such is the rationale for QE3.
Do I fear my commodity stocks going down like they did in 2008-9? Not with people like Mr. Lockhart running the Federal Reserve Bank. The problem of the commodities is too much liquidity chasing too few goods. If the Federal Reserve Bank’s solution is to just throw more fuel on the fire, then I’ve nothing to fear. QE, which I affectionately call the Bernanke Put, will be the ultimate cause of hyperinflation. It is as though they are trying to fulfill this prophetic video that the National Inflation Association created a few months ago: