Anyone who survived the social experiment of the Weimar Republic knows a thing or two of the intrinsic contradictions that underwrite Keynesian thought.
No one possess greater insight into these matters than Ludwig von Mises.
Here’s a quote from “Human Action”: Credit expansion (easy money) is governments foremost tool in their struggle against the market economy. . . It is the magic wand designed to expropriate the capitalists. . . to lower the rate of interest or to abolish it altogether, to finance lavish government spending. . . and to make everyone prosperous.”
That was 1966!
With the reduction in the federal funds rate by 500 basis points from January 2001 through September 2004, and again in October 2007 through January 2009 bringing us to our current 0% rate. Ludwig von Mises’ admonishment is well noted.
Why is this the case? Because the Fed can create its own money at no cost, and collect interest from banks that hold reserves at the Fed. This profiteering banking cartel can create cost free asset appreciation at no cost. Try that at home!
We should note that Bernanke is making anyone with cash chase an unqualified equity curve, a bubble, that could end at any time. How about those discounted bonds that are accumulating.
The Fed knows it has very little time. The exporting of inflation along with an emerging currency war don’t look good for the politicos that underwrite the indispensable nation that possesses a reserve currency status. All of this and more is in jeopardy.
Monetizing the debt has historical precedents.
Just ask Ludwig von Mises.