Bernanke: We've Been Printing Money

Tonight on 60 Minutes, Federal Reserve Chairman Ben Bernanke admitted to Scott Pelley that the Federal Reserve has been printing un-backed/worthless money to pay for the US government's recent spending blitz. Unbelievable.

The exchange went as follows:

Scott Pelley: Is that tax money that the Fed is spending (to fund the government's bailouts and stimulus packages)?

Bernanke: It's not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank we simply use the computer to mark up the size of the account that they have with the Fed. So, it's much more akin to, although not exactly the same as printing money.

Pelley: You've been printing money?

Bernanke: Well, effectively. And we need to do that because our economy is very weak and inflation is very low. When the economy begins to recover that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation.

Here's the interview. The above exchange begins at 7:55.



This is scary stuff folks. The Federal Reserve Chairman of the United States, arguably the most powerful man in America, thinks that the best way to end a recession is to flood the economy with worthless money. Hmmm . . . seems like we already tried that in the 1930s and 70s. Unbelievable. And I love his logic. Bernanke basically asserts that it's alright to increase inflation because inflation rates are low right now. What? This logic doesn't make sense whatsoever! It's comparable to a captain telling his crew to cut a hole in the ship because it only has a small crack at the moment.

Since when did devaluing money lead to economic prosperity? The Federal Reserve is the biggest sham/ponzi scheme, not only in US history, but in world history. When will we wake up?

Bernanke's nonchalant statement at the end of the exchange (i.e. "When the economy begins to recover that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation.") is pure rubbish. He just stated that inflation will save the economy and then he has the gall to say not 30 seconds later that he will do everything he can to make sure that the economic recovery does not involve inflation; does anybody else see a problem with this?

Something tells me we're headed for trouble.