Economic Recovery: The View From Bernanke’s Helicopter

This week, the world caught a glimpse of what Henry Hazlitt might have called the “seen� – the primary, most conspicuous consequence of a preposterous economic policy. Of course, it is the “unseen,� what comes next, that we ought to be worried about.

We are referring here to the dawning of the QE2 era. In the shadow of the midterm elections, Federal Reserve Chairman Ben “full steam ahead� Bernanke announced the second round of quantitative easing, or, for us non econo-scholars, “money printing.�

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Fed Announces Dollar Debasement. Markets Rejoice.

During yesterday’s trading session, the Dow Jones Industrial Average inched ahead 10 points to a new five-month high of 11,020. The financial news services attributed the advance to new disclosures from the Federal Reserve that it would continue debasing the dollar. True.

“Traders pushed shares higher Tuesday,â€� The Associated Press explained, “after minutes from the [September 21] Federal Reserve meeting kept hope alive that the central bank would take more action to stimulate the economy. The Fed had said…it was concerned that inflation was too low, and suggested it could step up its purchases of government bonds and take other action to encourage lending.â€�

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Debasing the Dollar and Yellen About a Fed Policy

To show you how prescient I am, I had earlier written a column about how I was horrified at the thought that Janet Yellen – currently running the San Francisco, California, Fed Bank into the ground – would become vice-chairman of the Federal Reserve, mostly because I am repelled by her ridiculous brand of economics, an opinion borne out by how she has been consistently wrong all these years until, well, just look around you. And at California!

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China Dumping US Debt Could be Great for America

Providing the world’s reserve currency has its privileges. Not the least of which is the continued willingness of foreigners to soak up the massive amounts of debt issued by the US despite the nation’s continued debasement of the dollar.

Yet, what if the foreign nations stopped buying? We’ve certainly heard of the calamity that should result from China cutting the US off, but perhaps we shouldn’t be so certain that’s the case.

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