Investors Finally Fear the Inflation Precipice - Robert P. Murphy - Mises Daily

Investors Finally Fear the Inflation Precipice - Robert P. Murphy - Mises Daily: "It is true that Bernanke could reverse course before things are too late, as far as the purchasing power of the dollar is concerned. But this would entail devastating pain to the banking sector, since the Fed would have to reverse the policies that bailed out the overleveraged titans in the first place. If Bernanke has to choose between saving rich bankers or the dollar, I am confident he will choose the former."

"By the same token, there are all sorts of scenarios where the natural 'unwinding' of the Fed's extraordinary policies won't work as planned. In particular, if even official CPI inflation starts creeping above 4 and 5 percent on an annual basis, while unemployment remains above (say) 8 percent, then it will become apparent that Bernanke's 'exit strategy' leads into a brick wall."

"in the 2nd quarter of 2009, the Fed's absorption of Treasury debt amounted to 48 percent of the new debt issued in that period. And ZeroHedge posted the following chart showing that the Fed is currently the world's largest single holder of Treasury securities, surpassing China:"