With the US in the throws of a partial government shutdown, one hears of tapering being put off until later in 2014. But does one want tapering at all? Tapering is expected to bring a rise in interest rates and therefore an increase in inflation and the prices of precious metals such as gold and silver. Is the ordinary person on the street, these days probably unemployed, even prepared for such an eventuality, in which food and general living expenses will rise under inflationary pressures?
The answer is probably not, which begs the question why taper at all? The current bond-purchasing program of the Fed is supposed to place a lid on increasing interest rates and therefore the spiraling upwards of inflation. How long can it continue in the face of such a monstrous deficit in excess of $16 trillion, which is furthermore expected to rise at the rate of about $1 trillion every year. Should one be warned and prepared for an enormous financial collapse? One would be well cautioned and advised of such, long before rampant public chaos would render such preparations much more difficult to undertake.
Buying time and kicking the proverbial can down the road in order to delay the anticipated default of the US economy is hardly a wise strategy. It is rather a sign that perhaps there is no solution for avoiding such a default. How does one generate enough funds to pay interest on one's national bonds when one's tax base is eroded by high unemployment and one's expenditures include substantial military upkeep, an extensive foreign diplomatic presence, and the waging of several wars in foreign countries (with maybe more wars to come).
Indeed, to taper or not to taper proves somewhat of a dilemma and has a hint of the Shakespearean.