Charles Hugh Smith: Anatomy of a Crisis: 2011

From Of Two Minds:

What's behind the disturbance in the financial Force? QE, ZIRP, the dollar peg and inflation, to name a few factors.

There is a great disturbance in the world's financial Force

1. There is a rising loss of faith in the conventional (i.e. propaganda) account of the U.S. economy.

2. The idea that quantitative easing is benign has lost credibility.

3. Much of the analysis of U.S. policy is narrowly U.S.-centric.

The key dynamic is the linkage of the renminbi (yuan) and the U.S. dollar.

4. China appears to be in the grip of a classic wage-price spiral inflation.

As noted in Your Pick, Ben, But One Goes Off the Cliff, the Fed's ZIRP and QE policies have pared future policy down to a stark fork in the road

So why is the Fed carpet-bombing the global economy? To protect the domestic economy? That makes no sense, for the Fed's policies are pushing oil up to the point where there is no way to keep the U.S. economy from tipping into recession. It isn't acting on behalf of the domestic economy, of course; it's acting on behalf of domestic banking and Wall Street.

The Fed is busily destroying the village, suposedly to save it--only it's the global village. But the Fed isn't the only player with a stake in its game, and the other players, notably China, are tipping their hand that they will have to act, and soon, to protect their own domestic economies from the Fed's destructive policies.

Additional note: I have often asked how hyperinflation would benefit the Financial Elites;blogger FOFOA kindly offered a detailed answer.

http://www.oftwominds.com/blogapril11/anatomy-of-crisis4-11.html