In an interview with the Financial Sense Newshour, author and economist Chris Martenson outlined the risks facing the US economy should the Federal Reserve embark on a new round of quantitative easing (i.e. money printing), also known as QE3, to prevent a collapse in financial markets.
If QE3 doesn't work, at that point, they've really risked everything. They've risked the dollar, they've risked the legitimacy of the Fed as an institution, they've risked D.C.'s legitimacy -- what there is of it. There's a lot of things at stake here and it's not clear to me what QE3 could really do about the fact that what we need to do is write down a whole lot of debt. Let it go bad. Let the people who made their bad bets take their lumps and actually suffer some real losses on their decisions. So far we haven't done that.
Chris Martenson is best known for his free YouTube series on debt, bubbles and peak oil, called "The Crash Course", which offers a startling presentation on global economics and the ongoing financial crisis.
Listen to the interview with Chris Martenson on the Financial Sense Newshour here.
