As mentioned on The Korelin Economics Report, the United States monetary system is based on bills of credit in violation of the US Constitution Article 1 Section 8 Clause 5 and Article 1 Section 10 Clause 1.  The US$ monetary system does not so much collapse as evaporate.  The housing crisis was just the first snowfall of an epochal blizzard.

This week the Federal Reserve took a step closer to acknowledging reality. Unfortunately it didn’t let that admission move it from a policy course firmly guided by fantasy. In its policy statement, Bernanke & Co. took the important step in noting that inflation expectations had taken hold in the country at large. However, in asserting that it expects inflation to moderate this year and next, the Fed gave no indications that these heightened expectations are gaining traction within the Open market Committee itself. As a result, it signaled no likelihood that it was actually prepared to do something to fight a problem which it doesn’t really believe exists in the first place.

FRANKFURT — The dollar rose slightly against the euro Thursday, picking up some ground after the U.S. Federal Reserve said it would leave interest rates unchanged for the time being and the European Central Bank again hinted that a rate increase is possible as early as its next meeting.