Is it inevitable that massive money printing will have serious economic consequences – and – how long can it continue?
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Announcer: Is it inevitable that massive money printing will have serious economic consequences and how long can it continue?
Robert Wiedemer: One thing about predicting that money printing will cause a lot of problems is that the first thing it really does is cause a lot of good things to happen. It causes the stock market to go up. It helps the economy to some degree, limited, but it helps, and so people aren't too worried about it. At the same time, as it goes on year after year after year, people do worry...Is the gig up? I mean, at some point it's just not going to work. Even the Fed itself, I think, actually worries about this. One reason that they tapered off money printing and raised interest rates ever so slightly, but raised it, is to try to say, "Hey, we know there's a problem here." Otherwise, why would you do that? They know there's a problem to doing these massive money printing or you just keep doing it, because there is a risk and they talk about all the time of taking the punch bowl away too fast and all that kind of stuff. So they clearly by their actions know there's a risk to all this money printing. The fact that they're starting to pull back is always an indication that in a certain way that they know the gig is up. They've got to get out of this pretty quick or we've got problems. So, if they do have to bring the punch bowl back, and so forth, I think that's going to bother the Fed. I think, it's going to shake up people in the Fed as well as on Wall Street that... "Oh my God, how long is this going to go on?" When you get that kind of mentality, that's when the gig really is up.