Yesterday, the Fed pumped another $47.25 billion into the markets, the biggest injection of cash since just after 11th September 2001. The Fed is run, of course, by Ben Bernanke. Ben’s a nutter, just like Mervyn King. In 2002, when the word “deflation” began appearing in the business news, Bernanke gave a speech about deflation. In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money.

He went on to say that control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. He referred to a statement made by another nutcase, the late Milton Friedman, about using a “helicopter drop” of money into the economy to fight deflation. After that speech, Ben got the nickname “Helicopter Ben.” In a footnote to his speech, Bernanke noted that “people know that inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation.”

Well, he’s certainly keeping his word.

This entry was posted on Friday, November 16th, 2007 at 9:07 am and is filed under Economy, Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.