With their backs to the wall, the Democrats have gone mad. They’re firing up the printing presses again at the Federal Reserve. Of course–we never read important news about our own country any more in the American media so this article had to come from the foreign press.
The Daily Telegraph in the U.K. reports: “As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve. Entitled Deflation: Making Sure It Doesn’t Happen Here, it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.”
The speech is best known for its irreverent one-liner: “The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost.”
The Telegraph goes on: “Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE). Investors basking in Wall Street’s V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.”
Perhaps Obama is using this money to slow down bank failures by the subprime housing crisis wherein millions of homes were sold to blacks and illegal aliens who trashed the places, then fled into the night rather than pay their mortgages.
The article notes “Andrew Roberts, credit chief at Royal Bank of Scotland, is advising clients to read the Bernanke text very closely because the Fed is soon going to have to the pull the lever on monster quantitative easing (QE). ‘We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable,’ he said in a note to investors.”
Let’s go over Economics 101 again, the lesson that the kafirs in Zimbabwe and now apparently the Jews in the Federal Reserve can’t seem to wrap their minds around. Money or gold has value for two reasons: A) It is scarce, and B) There is a consensus of opinion on the part of everybody that it is valuable, a consensus which has to exist if economic man is to function. A $100 bill is nothing but a piece of paper; it has value only because we all agree that it does.
Gold and silver coins contain X amount of gold and silver, right in your hand. Paper money is essentially an IOU for X amount of gold and silver, or used to be when we were allowed to trade in those precious metals. The fact is that right now, these days, money is just paper.
When you increase the supply of paper money, making it essentially endless, a process called inflation sets in, because goods and services represent actual value such as materials and human labor and the more paper is in circulation, the more paper is demanded for all these goods and services. How exactly people reach the consensus or awareness that more paper in circulation means higher prices is something of a mystery, but it happens. Look at Weimar Germany. Look at Zimbabwe.
The American economy right now is a basket case. If that bungling mulatto in the White House is bamboozled by his Jewish advisers into printing endless paper money, massive inflation will cause a disaster unseen since the First Great Depression.
