*Dow Theory Letters, by Richard Russell, April 7, 2008
“An incredible amount of fiat paper (currencies) is being injected into the world markets. There’s also a mind-numbing amount of currency on the sidelines. There is more than $3.5 trillion parked in money market funds in the US. Trillions of dollars are now lodged in the so-called sovereign wealth funds. Arab coffers are bulging with dollars waiting to be spent. I’ve yet to see a figure covering all the currencies that are parked in banks, equity funds, mutual funds, pension funds, and in private hands. The sum total must be almost beyond belief.
Ironically, the longer this recession or whatever you want to call it lasts, the more money will be pumped into both the US and the world economies. Here in the US it now requires over five dollars in debt to generate one dollar of GDP. The creation of new money is massive, with the Fed and world central banks running the printing presses overtime as they seek to ward off recession and bring back prosperity.”
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