Boston Fed Head calls for “open-ended” quantitative easing
While several heads of Federal Reserve Banks have called for more quantitative easing, Boston’s Fed Head Eric Rosengren has upped the ante and is calling for “open-ended” quantitative easing of a “substantial magnitude.” No joke.
Apparently, Rosengren has bought the John Law/John Maynard Keynes position that money is merely a medium of exchange and that the quantity does not matter as long as certain “economic outcomes” are achieved in the short run. Such a position furthers the thinking that potential future problems, such as hyperinflation, will not arise or that they can be handled as they arise. You have to wonder if Bernanke will not take Rosengren to the woodshed for this outburst.
Although Bernanke is not afraid to admit to being a paperhanger, his image still suffers from his “electronic printing press/helicopter” comment that earned him the moniker “Helicopter Ben.” As the high priests of paper money, members of the Fed are supposed to be reserved, controlled, with the ability to show restraint. Supposedly, they know just how much paper money to print, they know when the soup if just the right temperature. How restrained is calling for open-ended quantitative easing?
The sad history of paper money is that politicians print it until it is worthless. Statements by a few influential persons does not guarantee that we are on that road to destruction, but the fact that heads of Federal Reserve Banks are publically calling for more fiat money is evidence that the climate is right for a major step down that road.
The first step was taken in 1913 with the establishment of the Federal Reserve System. Roosevelt’s 1933 gold call-in was step number two. Number three was the removal in the Lyndon Johnson years of the requirement that the money in circulation be limited by the amount of supposedly gold held at Ft. Knox. Of course, Nixon “closing the gold widow” in 1971 put all the machinery in place for unlimited money creation.
Now the climate is ripe for massive printing because the Establishment has been so successful in selling Keynesianism as a monetary policy that there will be no opposition to more printing. Batten down the hatches. Hyperinflation is coming your way.