In November, the Fed announced its intent to purchase agency mortgage-backed securities directly from the market “to reduce the cost and increase the availability of credit for the purchase of houses.”

After pumping $350 billion worth of freshly printed dollars into the system, they’ve succeeded in forcing mortgage rates to near historic lows. Great news for homeowners able to refinance; yet new home sales remain stagnant.

There’s no telling when the housing market will stabilize. But the Fed is certain to continue fueling the fire with cheap money until recovery signs appear.

The inflationary consequences from over a trillion new dollars added to the system may not be imminent, but they are certainly inevitable. Investors following Casey Research’s flagship advisory service The Casey Report are preparing their portfolios to take hold of this powerful emerging trend.