November 12, 2010

PETER SUDERMAN: Ben Bernanke’s Made-up Money: With its new round of quantitative easing, the Fed enters uncharted territory.

UPDATE: Reader Richard Wagner writes:

If I read the current articles correctly, support for QE2 is found, in part, in the belief that current inflation is so low that there is some wiggle room to print money and not risk actually causing inflation. Some articles say there is currently very low inflation, and others say significant inflation has already started. To get the real story, I went straight to the source – my wife – who is responsible for 100% of the household expenditures in our family. I make the money, and she stretches it as far as it will go. I asked her if prices are rising more than normal recently. Without hesitation, she said yes, without a doubt.

Yes, I’ve noticed that too. And then there’s the skyrocketing price of bacon . . . .

ANOTHER UPDATE: Reader Charlie Domino is suspicious:

Just had a nasty thought….What if inflation isn’t a bug, but a feature? The timing of this decision is suspect. If it sets off inflation, angers our creditors, and starts a trade war, the effects will start to be felt in the 2nd half of 2011, and be roaring in time for the elections in 2012. At this point of course, any fiscal catastrophe will _obviously_ be the fault of the Republicans in Congress. Why, as soon as they took power, things started going to hell! I’m sure the legacy media will helpfully tell us so–repeatedly.

There was speculation as to whether the President would retrench in the wake of the elections, or double down. I think we now know which, regardless of whether my speculation is true.

Well, for that to be the case, there’d need to be some sort of coordinated media campaign. Hey, wait . . . .

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