It seems to be more of the same except this time it is worse. We now see that the U.S. govt has absolutely no restraint whatsoever with a $700billion bailout plan concocted overnight speed tracked for implementation. What they are doing will have devastating long term implications on the U.S. economy because it has only upped the ante on reckless spending. Granted, this plan would not be a pure expenditure because they would be buying “assets” i would be willing to bet that it will not be a money gaining operation and the cost to tax payers will be significant. The timing of this certainty is a little less clear because much like the U.S. believes that AIG was too big to fail, the world seems to believe that the U.S. is too big to fail and therefore is willing to continue to buy US treasuries in fear.

However, this will not last. What will most likely happen now is that severe inflation will become a global problem. With inflation comes political unrest. With enough politcal unrest, the whole pyramid scheme of the U.S. dollar will be turned upside down.

The near term remains very unpredictable but I think the one thing that is for certain now is that inflation is on its way in a big way.