Posted by: Steven Shaw | March 18, 2009

Helicopter Ben on 60 Minutes

Do yourself a favour, watch Ben Bernanke on 60 minutes.

I wonder how many times Ben utters the word “stabilisation”? Let me know if you count them! 🙂

Some highlights:

  • Ben is certainly printing money to “capitalise” the banks. They don’t say how much except that the Fed has doubled it’s balance sheet.
  • “It’s not tax money” Ben says as if that makes it ok, “The banks have accounts with the Fed… so to lend to a bank we simply use the computer to mark up the account they have with the Fed. It’s much more akin to printing money than to borrowing.”. However, if the banks have been lent the “new money”, how can that possibly recapitalise them?
  • Ben trys to appear as a regular middle-class person, growing up in a small town and working himself through university. His grandfather owned a store on “Main St”.
  • His greatest fear is that there is not enough political will to complete his “stabilisation” of the economy, banks and markets. He appears to be giving himself a psychological out if the American public finally say “Enough!”.

Would Obama have to be concerned now about large bonuses being given out from the UK arm of AIG if they’d simply let AIG go bankcrupt in the first place? Those employment contracts would be worthless now if it wasn’t for the Fed.

This reminds me of the “Stabilization is Chaos” T-Shirt being sold by the Mises Institute. I didn’t understand it at the time but I’m beginning

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