"I am somewhat concerned that our economy, for better or for worse, may be heading down the path where it relies on artificially low rates," Zuchhi says, adding that he thinks it's going to be "very very difficult for the Fed to work its way out of it balance sheet without causing some serious problems."
As he sees it, the front line in this battle is not the bond market or interest rates, it's currency."The dollar is, in fact, the whole thing," Zucchi says, adding that he "thinks Bernanke probably goes to sleep every night thinking about if he is going to wake up with the same dollar that he had today, and that's his big worry."
As much as Bernanke has commented that the problem is manageable, Zucchi is unconvinced.
"Debt bubbles ultimately end, in fiat currencies, when the trust that outside investors have evaporates." It is not only something that has happened before, it is also the kind of crisis that tends to happen rather quickly when it does.