Tuesday, October 25, 2005

The Most Powerful Man in the World

The Bush administration made yet another huge gaffe by appointing Ben Bernanke as the new Fed chief. The following is a quote from Bernanke on inflation that I jacked from Lew's Blog.

"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, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

Positive inflation? Isn't that like positive cancer? - Norman Singleton


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