Economic fix: print more money?! (Insider Report)."Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply," explained a Harvard-trained economist during a November 21st speech before the National Economists Club in Washington. "But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , which is equivalent to raising the prices in dollars of those goods and services. Sounds like an accurate critique of the fiat money fiat money (fī`ət, fī`ăt), inconvertible money that is made legal tender by the decree, or fiat, of the government but that is not covered by a specie reserve. system inflicted on our nation with the 1913 creation of the Federal Reserve System, doesn't it? Well it would--except that the speaker was Federal Reserve Governor Ben Bernanke, and his remarks were an endorsement of using inflation--an increase in the money supply--to "cure" deflation--falling prices and declining asset values. Bernanke ended his little sermon on the supposed value of a fiat money system by concluding, "under a paper-money system, a determined government can always generate higher spending and hence positive inflation." A brief, accurate translation of Bernanke's remarks, noted New York Post The New York Post is the 13th-oldest newspaper published in the United States and the oldest to have been published continually as a daily.[3] Since 1976, it has been owned by Australian-born billionaire Rupert Murdoch's News Corporation and is one of the 10 economics writer John Crudele, is, "we'll just print more money if the economy doesn't respond to traditional remedies." But while Bernanke insists that the government can print new money "at essentially no cost," Crudele supplies the historical context that the Fed governor artfully avoided: "The printing press image is a hot button with economists because that's exactly what the Germans did in the 1920s when that country was faced with huge budget deficits because of World War I." The resulting hyperinflation Hyperinflation Extremely rapid or out of control inflation. Notes: There is no precise numerical definition to hyperinflation. This is a situation where price increases are so out of control that the concept of inflation is meaningless. obliterated o·blit·er·ate tr.v. o·blit·er·at·ed, o·blit·er·at·ing, o·blit·er·ates 1. To do away with completely so as to leave no trace. See Synonyms at abolish. 2. the German mark's value, leading to the imperishable im·per·ish·a·ble adj. Not perishable: imperishable food; imperishable hopes. im·per image of German citizens having to drag wheelbarrows full of money to stores to buy a day's worth of groceries. "Those economic problems eventually led to the political upheavals in Germany that brought Adolph Hitler to power," observed Crudele. "Enough said? Bernanke should shut up." Actually, Bernanke's devastatingly candid can·did adj. 1. Free from prejudice; impartial. 2. Characterized by openness and sincerity of expression; unreservedly straightforward: In private, I gave them my candid opinion. remarks should be given the widest possible audience. |
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