"It's not the fear of an event of some sort," such as a terrorist attack, said Peter Boockvar, equity strategist at Miller Tabak, whom I spoke to this week. "It's the fear that the piece of paper in your pocket you call money will devalue over time."
To stave off a liquidity crisis last year, Bernanke's Fed turned on the money spigot, flooding the system -- and world -- with dollars. In the short term, that helped avert a second Great Depression. But in the long term, with each new dollar introduced into the system, each dollar you hold becomes worth less. That's more than just inflation, which we think of as simply rising prices. That's debasement of not only our currency, but the globe's reserve currency. And that makes countries like China -- which holds the greatest percentage of U.S. debt -- very nervous.
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