Sunday, November 7, 2010

On a Clear Day You Can See the U.S. Dollar

Well said by Paul Kedrosky  disapointed in the FED's action last week. trashing the dollar. 

Paul Kedrosky

Some choice quotes forwarded by Paul Brodsky at QB Asset Management on this fine Fed day:

"…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S, government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
-          Ben Bernanke, November 21, 2002