Helicopter Ben strikes again

by drwasho on Aug 29, 2010

Helicopter Ben

It appears that 'helicopter Ben' will live up to his name after announcing that he would fire his inflationary guns to prevent a double-dip recession.  What are these guns exactly?  The promise to purchase more government debt & additional financial assets while lowering the interest rate charged on bank-reserves.

This is hardly surprising, Bernanke has promised as much before.  It appears that the Holy Grail of Full Employment will justify any inflationary extreme.  In response to the inflation concern, he says: "... inflation doesn't seem to be a risk at this point and at this stage, the probability of additional disinflation appears to be low".

Well Ben, the expansion of MONEY and CREDIT is the very definition of inflation.  Does it seem somewhat contradictory for you to disregard the 'threat' of inflation in the same speech where you promise to be its architect?  Of course we know you refer to asset price inflation.  Yet if rising asset price inflation (due to actual inflation) 1) preceded and built the BOOM, & 2) the BOOM's unsustainable inflationary growth caused the inevitable BUST, why must we return to our inflationary folly like a dog to it's vomit?

Think of the children Ben... think of the children.

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