Helicopter Ben is at it again:
Bernanke’s Fed has engaged in what has euphemistically been called “quantitative easing” or “QE.” The result of a QE program, Bernanke says, will encourage consumer spending, reduce unemployment, strengthen the dollar and help savers. In short, if it works, QE can be a magic elixir (or at least a palliative) for the nation — if it works. In the past three years, we have had QE1 and QE2. Neither of those created a significant amount of jobs nor did it spark consumer spending, strengthen the dollar and help savers as it was intended to do. Now the Fed is launching QE3. What do you call it when someone keeps doing the same thing over and over again, hoping for a different result?
The name for this particular brand of insanity is inflation. So far we have avoided the hyperinflation that could cause a total economic collapse. However,
The inflation rate since the beginning of 2007 through 2011 was 8.22 percent.
That means a dollar saved in 2007 is now worth 93¢, even taking into account interest from keeping it in the bank.
Where did the value of the money go? To help pay Obama’s massive debt:
In monetizing the debt, a country borrows money and then pays it back with inflated dollars. Hence it is monetary policy that helps the country pay down its debt. (Bear in mind that for all this talk about China and Japan, Americans hold most of U.S. debt. This means is that individual Americans that help pay down the debt through a stealth tax known as “inflation.”)
So much for Obama’s oft-repeated promise not to raise taxes except on the demonized “rich.” Everyone who owns American currency is getting taxed through the nose.
Bernanke admits that the QEs will have diminishing returns in terms of short-term benefit for to the economy — and the returns were insignificant to begin with. Why does he keep risking a catastrophic plunge into hyperinflation?
There has been increasing speculation that Bernanke’s Fed is doing the Obama Administration’s bidding; i.e., pumping more money into the economy to make the economy look better before the presidential election.
This has happened before, under a similar administration.
G. William Miller, Fed chief under President Jimmie Carter, did pump money into the economy to help Carter’s re-election chances because, according to Miller, Carter told him to do so.
Bernanke is highly motivated to keep the Moonbat Messiah in power. Chances are excellent that Obama would reappoint him to his extremely powerful post when his term runs out in 2014, so as to keep monetizing the debt. Romney has made it clear that he would not.
Graphic and tip compliments of Zappatrust.