17 December 2008

Money Bomb Hits America!

Helicopter Ben Spotted Dumping Cash Over NYC

9 months ago, the Guardian predicted that Fed Chairman, Ben Bernanke, would lower interest rates to darn near zero and start cranking out more funny money to inject into the market. They were right, but I bet the amount they predicted wasn't in the freakin' Trillions range [NYT]:
Going further than analysts anticipated, the central bank cut its target for the overnight federal funds rate to a range of 0 to 0.25 percent, a record low, virtually bringing the United States to the zero-rate policies that Japan used for six years in its own fight against deflation. The rate had previously been 1 percent, and a cut of a half-point had been widely expected.
All of the new tools amount to printing money in vast new quantities, and the Fed has already started the process. Since September, the Fed’s balance sheet has ballooned from about $900 billion to more than $2 trillion as the central bank has created new money and lent it out through all its new programs. As soon as the Fed completes its plans to buy up mortgage-backed debt and consumer debt, the balance sheet will be up to about $3 trillion.
Is this going to work or are we going to have $500 Million notes like Zimbabwe to buy Pez dispenser refills? The press is putting some suit through the wringer for running a $50B Ponzi scheme, but nothing about a federal government that is ruining our economy faster than the fat guy taking a dump at a housewarming party. Maybe all the media companies are waiting for a slice of the bailout pie, so they're keeping their yaps shut.