Dear CIGAs,

Add this to the Begging Bowl Fed loan window and TARP:

Quantitative Easing

Be prepared to watch the Federal Reserve over the next 18 months as this is the last of two arrows left in the quiver. Quantitative Easing is going to look more and more attractive.

Quantitative Easing is the process of dumping money directly into business enterprises. The other tool is simple – announce a target of 2% for 10 year bonds to further drop mortgage rates as you Helicopter Drop funds directly into non-financial business enterprises for the public to pick up and spend. This is a tactic added to the Begging Bowl Fed loan window and TARP.

Business glossary
Quantitative Easing
Guardian.co.uk, Tuesday October 14 2008 12.10 BST

Quantitative easing is what non-economists call ‘turning on the printing press’.

In extreme circumstances, governments flood the financial system with money, easing pressure on banks and business entities by giving them extra capital.

Ben Bernanke, the chairman of the Fed, won the nickname ‘helicopter Ben’ when he floated just such an idea earlier this decade. US economist Milton Friedman had originally said it would be theoretically possible for governments to drop large amounts of cash out of helicopters for the public to pick up and spend.

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Dear Jim,

Many respected commentators, even in our camp, warn not of hyper-inflation but rather a bone chilling depression.

Help me please.
CIGA Arlen

Dear CIGA Arlen,

History declares that all major hyper-inflation started in depressive to depression type business conditions as a currency loss of confidence event.

The key is the word HYPER which means a total currency unwind.

Large inflationary periods are products of the mechanics that creates bubbles, but are not HYPER in nature.

Bubble-Inflation and Hyper-Inflation are two distinctly different events

All "Hyper-Inflation" events have occurred as a product of "Quantitative Easing." Google that term and study it.

The Fed has announced their move towards "Quantitative Easing" because of all that occurred so far in bailing out the good ole boys that caused the problems with their damn OTC derivatives, now known as "Toxic Paper."

All the best,
Jim