If it is the first responsibility of the Federal Reserve to protect the dollars that Americans earn and save, is it not dereliction of duty for the Fed to pursue a policy to bleed value from those dollars? For that is what Chairman Ben Bernanke is up to with his QE2, or “quantitative easing.”Translation: The Fed is committed to buy $600 billion in bonds from banks and pay for them by printing money that will then be deposited in those banks. The more dollars that flood into the economy, the less every one of them is worth.
Bernanke is not just risking inflation. He is inducing inflation.
Egging Ben on is the Nobel-prize winning New York Times columnist Paul Krugman. Fed policy is too timid, says Krugman.
He wants to panic the public into believing the money they have put into savings accounts and CDs will be rapidly eaten up by Fed-created inflation, so they will run out and spend that money now to get the economy moving again.
Whatever the economics of this, the morality of it is appalling.
at The American Conservative.
Carl Wicklander,
Regular Columnist, THL
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