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.”Well, it was ostensibly set up to protect the dollar. Before you fall for that one, maybe you ought to find out what Andrew Jackson thought of the idea of a central bank.
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.
The other Chinese complaint is that they lent us trillions to buy Chinese goods and now we are robbing them by depreciating the dollar-denominated Treasury bonds they accepted in return for their goods.
Pay back your banker in Monopoly money, and you will find you are soon unable to borrow from anyone anywhere.
The Fed...retains a confidence that it does not deserve, when one considers that, when it was created in 1913, a $20 bill could be exchanged for a $20 gold piece.
Today, it takes seventy $20 bills to buy a $20 gold piece, which means the dollar can buy in 2010 what you could get for 2 pennies in 1910. Quite a record for a central bank set up to protect the dollar.
Friday, November 12, 2010
Pat Buchanan on the Fed and QE2
Not much I can add to this, methinks. You'd serve yourself well by reading the whole thing.