Think the Fed’s QE1 and QE2 will cause hyper-inflation? I did, until I read Jeffrey Rogers Hummel’s recent paper “Ben Bernanke Versus Milton Friedman”. Bernanke is simply shuffling paper around to bail out his bankster buddies and he is doing it without increasing the money supply – despite popular belief.
As impressive as that is, there is a severe downside. The Fed-manufactured crises of 2008 has literally made them the economy’s central planners. Here is an excerpt from Hummel’s paper:
Under the old central planning—which performed so poorly in the Soviet Union, Communist China, and other command economies—the government attempted to manage production and the supply of goods and services. Under the new central planning, the Fed attempts to manage the financial system and the supply and allocation of credit.
But now with Bernanke, the central planning aspect of central banking has become far more encompassing. As George Selgin put it in an interview, “the Fed . . . has morphed into a central planning agency with a corporate welfare department.”
“Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…” said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. “You know what? It doesn’t matter. None of this–this so-called ‘money’–really matters at all.”
“It’s just an illusion,” a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. “Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”
According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, “Oh my God, he’s right. It’s all a mirage. All of it–the money, our whole economy–it’s all a lie!”
While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.
Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.