Dear Ben Bernanke, Don't Debase Our Currency
A group of very heavy weight business figures and economists has published an open letter to Fed chairman Ben Bernanke. His decision to engage in a new round of quantitative easing--the so-called "QE 2"--is both unnecessary and dangerous, and these are people of such standing that even our increasingly imperial Fed chairman cannot ignore them.
The planned asset purchases risk currency debasement and inflation....We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.
The signatories include John Taylor, perhaps the most respected monetary economist in the nation (Dr. Taylor has blogged here on Ricochet), former chairman of the Council of Economic Advisors Michael Boskin, and economist John Cogan, an expert on the federal budget.
What Ben Bernanke intends to do is print money--$800 billion of it--and some very important people have chosen to say "nuts to that." This is big.
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Sep '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
All well and good, but does anyone in this administration (and I include the Fed Chairman in that word) listen to anyone outside their bubble?
Jul '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
And he'll get pressure from Congress.
Sep '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
Another signatory who's work I admire, Charles Calomiris of Columbia was on tv this morning saying that he believes this letter will provide cover for disenting voices within the Fed as well. I do not put Bernanke in the same catagory as the self-serving, professional pols who's primary understanding of economics is that it is a useful tool in the quest to obfuscate their grab for political power.
May '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
This accelerates a trend line that has existed for more than a decade. The Canadian Dollar is now a harder currency than our own. It is as if the Govt. is trying to scrap the dollar as the world currency of reference. The damage this will cause will be huge if it happens.
Nov '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
From the Wikipedia:
"The primary reason a government will debase its currency is financial gain for the sovereign at the expense of citizens...Inflation follows, allowing the sovereign to pay off or repudiate government bonds [emphasis mine]. However, the purchasing power of the citizens’ currency and standard of living has been reduced."
Debasing the currency is always a bad thing, and people have known this for at least 2000 years. So why is Bernanke doing it? Is he that stupid? (Yes, I know; it is a rhetorical question)
At the risk of sounding like a right-wing nutter, I say that QE 2 is tantamount to high treason, in that it is nothing but government-sanctioned counterfeiting, and counterfeiting has traditionally been viewed (rightly) as a threat to the security of the State. In the good old days, they hanged counterfeiters. Ben Franklin famously printed bills bearing the admonition: "To counterfeit is Death."
Well, maybe they are. That would certainly be consistent with everything else the Obama administration has done to diminish America's standing in the world.
Edited on Nov 15, 2010 at 10:50amMay '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
I imagine the Chinese would like to sign that letter as well. Probably a host of other governments too. This sort of thing has repercussions around the world.
May '10
Re: Dear Ben Bernanke, Don't Debase Our Currency
I don't see how anyone can possibly be anti-American any longer. We did the stimulus, and it helped the economies of Spain and China generate "green" jobs. Now, with the QE2, we are helping the economies of Mexico and Peru.
Always thoughtful and unselfish, we Americans. Jobs jobs jobs. But all are Jobs Americans Won't Do.