Ben's Helicopters are Here!
Mike Hewitt
The US Federal Reserve is increasing the monetary base at an unprecedented rate in response to the present deflationary asset crunch, following the longest running inflationary boom in the country's history.
Newly printed dollars are being used to replace the capital losses of America's corporations. If it were possible to replace wealth simply by printing money, humanity would have eliminated poverty shortly after discovering the printing press. Instead, it always results in the same fate - destruction of the currency through the process of hyperinflation.
The following chart using data from the Federal Reserve of St. Louis visually reveals just how extreme the latest measures from the US Federal Reserve have impacted the monetary base.
The last three months have seen an increase of $636.7 billion which is equivalent to the increase of the previous eighteen years!
On November 21, 2002, Governor Ben Bernanke made the infamous remark which earned him the nickname "Helicopter Ben" when he responded why deflation need never be an issue for the US economy (link here).
"U.S. dollars have value only to the extent that they are strictly limited in supply. 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." (Ben Bernanke before the National Economists Club in Washington, D.C. - November 21, 2002)
It would appear that Helicopter Ben is making good on his word...
Cartoon courtesy of BlueWire Studio.
Published on http://DollarDaze.org - Dec 1, 2008.
_____
© 2008 DollarDaze
ABOUT THE AUTHOR
 |
Mike Hewitt is the editor of DollarDaze.org, a website pertaining to commentary on the instability of the global fiat monetary system and investment strategies on mining companies. |