Bernanke's Posturing Ignores Inflation Reality and Hurts Americans

In a recent American Thinker article discussing the effects of "quantitative easing," I remarked that the "Federal Reserve has laid the charges, connected the leads, and now stands ready at the detonator." From the AT piece: In QE, a nation's central bank buys financial instruments, such as Treasury bonds, with money decreed into existence through electronic transactions. The objective is to "stimulate" economic activity by injecting additional currency into circulation and bank reserves. Plusher reserves would theoretically encourage lenders to lend, which would kick-start business activity and home purchases. QE derives from the Keynesian economic hypothesis that government spending helps end recessions. I noted that reality never complies with Keynesian theory. Economist David Ranson expands, pointing out that the Fed is encouraging "the widespread impression that money creation is inflationary only when that money actually goes...(Read Full Post)