Debt Ceiling

The debt ceiling will eventually be raised. No doubt about it. The U.S. depends on debt to grow. That’s the Keynesian philosophy, the school of economic thought that most academic institutions teach and advocate and the one that Bernanke and Krugman advocate. To ease the debt burden, the Fed and government will continue to inflate prices. How can I be so confident? Because real change can’t occur unless enough people know what to change.  Obama hasn’t brought change. We are still in Iraq and Afghanistan. America is an empire that is trying to expand. It must, in order to maintain the status quo. I think long term, it’s safe to bet on inflation and high commodity prices. I wonder if the Fed will run into opposition if they propose QE3. They may, and if they are prevented from doing it, the markets will probably tank significantly. So, the Fed strategy may be to let the market tank temporarily and say, “See? We need more QE”. Then they’ll get the OK to do it and it’ll happen, and the market continues onward and upward. Either that happens, or no one prevents the Fed from QE3 and the market goes up anyway. So what’s the takeaway? By stocks, commodities, precious metals, etc. Stay out of long term fixed income. Don’t go all out on assets all at once. Buy more if prices dip and even more if the Fed is thwarted from doing QE3.