Quantitative Easing Foiled!
Ben Bernanke's plan to save the economy? Print more money. But what happens when the printer breaks?
Because of a problem with the presses, the federal government has shut down production of its flashy new $100 bills, and has quarantined more than 1 billion of them -- more than 10 percent of all existing U.S. cash -- in a vault in Fort Worth, Texas, reports CNBC.
"There is something drastically wrong here," one source told CNBC. "The frustration level is off the charts."
Officials with the Treasury and the Federal Reserve had touted the new bills' sophisticated security features that were 10 years in the making, including a 3-D security strip and a color-shifting image of a bell, designed to foil counterfeiters. But it turns out the bills are so high-tech that the presses can't handle the printing job.
More than 1 billion unusable bills have been printed. Some of the bills creased during production, creating a blank space on the paper, one official told CNBC. Because correctly printed bills are mixed in with the flawed ones, even the ones printed to the correct design specs can't be used until they 're sorted. It would take an estimated 20 to 30 years to weed out the defective bills by hand, but a mechanized system is expected to get the job done in about a year.
Smells like a Ron Paul stuxnet to me.
(h/t Laura Ingraham)
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Comments :
Sep '10
Re: Quantitative Easing Foiled!
Its time for "Spank the Bernank" movement.
Re: Quantitative Easing Foiled!
Pseudodionysius: Its time for "Spank the Bernank" movement. · Dec 6 at 6:54pm
or "Break the Bernank"...
May '10
Re: Quantitative Easing Foiled!
This wouldn't be a problem if we printed more! More! Faster!
Sincerely Yours,
The Krugman
May '10
Re: Quantitative Easing Foiled!
Let me be the guy who'll state the obvious: QE2 will proceed regardless of problems at the Bureau of Printing and Engraving. The Federal Reserve engages in open market purchases electronically via its New York City branch; that's where the money creation genuinely begins.
May '10
Re: Quantitative Easing Foiled!
This reminds me of a story told to me by an editor of the Houston Chronicle.
Years ago, the Chronicle decided they were ready to increase their circulation by purchasing a new printing press. Presses of that kind were only made in one of the Scandinavian countries and cost a ridiculous amount of money, but they placed the order and eagerly awaited its delivery.
The huge press was placed on a ship and sent our way... but a storm in the notoriously nasty North Sea sent the printing press overboard. There was apparently no insurance to cover a disaster of this magnitude. The Chronicle's investment lies in Davy Jones' locker, along with their hopes of a wider audience.
Re: Quantitative Easing Foiled!
Michael Labeit: Let me be the guy who'll state the obvious: QE2 will proceed regardless of problems at the Bureau of Printing and Engraving. The Federal Reserve engages in open market purchases electronically via its New York City branch; that's where the money creation genuinely begins. · Dec 6 at 7:07pm
Yes, yes, of course. The answer to the question "what happens when the printer breaks?" is of course, "the government continues unimpeded with it's ill conceived spending plans." But at the very least, the malfunctioning money presses are a bad omen of the repercussions to follow from this harebrained scheme.
Dec '10
Re: Quantitative Easing Foiled!
The one thing heretofore the government could do well well was print money. Maybe not back it up with anything tangible, spend it recklessly, sure, but the act of printing it...no problem.
Now they can't even do that. Begorrah, it's enough to make you lose your faith.
Re: Quantitative Easing Foiled!
Most revealing exchange from Bernanke's "60 Minutes" interview last night:
Paging Dr. Hayek!
Jul '10
Re: Quantitative Easing Foiled!
Am I the only one encouraged that this lot cannot get printing money right?
Of course, only a teeny weeny fraction of the dollars in circulation actually take the form of tangible bills.
Dec '10
Re: Quantitative Easing Foiled!
Did you buy gold? I did at $900. It's $1420. It still isn't commensurate with the $800 in 1980 when interest rates were nearing 20%. Gold will go to $3000 - 5000 in the next few years.
Beware of silver ETFs. I hear there isn't enough real silver to cover the paper.
Why? Because we're scroomed. (Screwed and doomed.)
May '10
Re: Quantitative Easing Foiled!
Before QE2, I wondered when the prices of gold (spot and future) would discontinue their climb. Now, who knows, for the money produced by QE1 and QE2 will remain in the economy in people cash balances until the Fed engages in open market sales so that it can hoard the money it earns from selling Treasury debt instruments and thereby reduce the money supply and raise interest rates. In reality, this is what the Fed should be doing, if anything.
Aug '10
Re: Quantitative Easing Foiled!
American decline seems to manifest itself many small ways.
I seem to remember America being much more competent nation as a child.
If I remember correctly, we were even a creditor nation then.
...and NASA did outer space instead of PC outreach (sorry, couldn't resist)
Jul '10
Re: Quantitative Easing Foiled!
No problem. I'll just use the hundreds from My Monopoly game.
Jul '10
Re: Quantitative Easing Foiled!
I am struck by the fact that they printed 1 billion bills before they recognized a problem. Talk about bureaucratic inertia.
I imagine a newspaper editor yelling "Stop the presses!" on December 7, 1941, and having that command take effect sometime during the Kennedy administration.
Sheesh!
Jul '10
Re: Quantitative Easing Foiled!
Could there be a more fitting image than this for our sorry economic times? We can't even print money without losing money. It feels like something straight out of the Carter administration.
Aug '10
Re: Quantitative Easing Foiled!
Question for the legal experts: If they are printing currency with the signature of a person that is NOT the current Secretary of the Treasury, does that mean the currency is not legal tender?
Does the signature of the Secretary of the Treasury HAVE to be printed on the bills for them to be legal tender, or is it merely an aesthetic consideration?