4/3 Action-Reaction

I posted the Weekly with charts of Fed assets, aggregates, and industrial cost inflation.  These measures are reaching extremes that are causing reactions around the world.  The dollar is slowly being replaced  in international transactions.  However, here in the U.S. the reaction has been a tea party congress intent on dramatically slowing the growth of government spending.  If they fail then the U.S. will slide down into hyper-inflation as the dollar quickly loses it's reserve currency status.  However, all the House need do is act as spoiler, failing to pass liberal budget proposals and failing to pass debt ceiling increases and allowing spending shutdowns as the vehicle for getting serious entitlement reform.  Thus, I don't see the dollar sliding off the end of the world until at least 2013.  If the Dems take back the House in the 2012 election (or look like it a week before) then getting back into precious metals will be the path to take.
The Fed is coming under increasing scrutiny by Congress and we can forget about QE3.  The growth of the Fed balance sheet has slowed to $13B a month while the Fed buys $26B in Treasuries and sells off $11B a month in MBS and Agencies under the cover of QE2. This will result in April and beyond reductions in monetary base and M1 growth rates.  Ron Paul is the chairman of the House Monetary Policy Subcomittee of the Financial Services Committee and will bring the Fed under increasing scrutiny and congressional review of it's policies and activities.  This is a more important event than most realize.
I believe that the congressional gridlock will be bearish the metals and stock market.
Ultimately the dollar will be worthless, but silver and gold have already discounted this event coming much sooner than I believe it will.  Since 2002 silver has increased 900% and has doubled as a result of QE2.  I expect the dollar to lose it's reserve currency status several years from now, UNLESS the house caves in and allows the deficits to grow unchecked.  We already know what Ben is and he fooled me once, with QE2.  Right now there are a thousand investor sites preaching the inevitable collapse of the dollar and they are all pushing gold and silver.  I got out of gold at 1220 and silver at 22+.  I expect to buy them back at lower prices, with patience.