Dec 17, 2010
The U.S. Federal Reserve is not printing money, Fed Chair Ben Bernanke said in a 60 Minutes interview that aired December 5.
Bernanke followed his vehement declaration by saying that the Federal Reserve is not changing the money supply in any significant way.
Now for those who have no idea what “quantitative easing”—the Fed’s stated strategy for stimulating economic growth—really means… quantitative easing essentially means printing money. For Bernanke to come out on national television and deny that the Fed is printing “money” and not changing the supply of currency is an absurdity.
Bernanke’s carefully worded statement the “money supply” has not changed in any significant way refers to M2, a measure of currency that includes M1, plus money market deposit accounts,money market mutual fund shares, small-denomination time deposits, saving deposits, overnight repurchase agreements, and overnight Eurodollars.
M2 has only grown approximately 3% over the past year as seen in the graph above. However, the monetary base (currency, coin and bank reserves), which the Fed actually controls, has more than doubled since August 2008. The jump is clearly depicted on the graph above; the change in monetary base over the past few years is significant!
So, bravo, Ben! Even though you’re not literally printing money, you are indeed creating new money through the Fed’s inflating of banking reserves. This sleight of hand only obfuscates the truth—that the Fed is creating currency to prop up the U.S. economy and stave off deflation. It is a carefully crafted, misleading statement that papers over the conceptual truth with semantics and omissions.
Bernanke’s 60 Minutes interview begs the question: Just whom does Mr. Bernanke think he is dealing with? An ignorant American public that is to blind to the truth behind his lies?
The truth of the matter is that American taxpayers are paying for these “non-increases” to the money supply that Bernanke and the Fed are spouting off about. The truth is, the Federal Reserve is slowly stealing money that the American public works so hard for. But why? To feed wealthy bankers and a bloated, inefficient financial sector. It is in their best interests that the Fed acts, not that of ordinary working Americans.
This article was posted: Friday, December 17, 2010 at 5:05 am