Tuesday, July 31, 2012

The Ultimate Modern Day Money Printing Advocate: Alan Blinder

Eight days ago, I pointed to a mad scheme promoted by economist Alan Blinder that would potentially release trillions of dollars into the economy. Such a scheme, if implemented, would put us on the road to Zimbabwe price inflation in no time.

Well that's apparently not enough money printing for Blinder. A week and one day later, Blinder is in the pages of WSJ calling for even another mad money printing plan. This time he wants to follow the Brits and have the Fed give banks cheap money, if the loan it out. Writes Blinder:

For a 25-basis-point annual fee, the Bank of England will soon start lending banks Treasury bills for terms up to four years. The banks can then turn around and use these bills as collateral to borrow at exceptionally low rates in the private markets; after all, T-bills are the ultimate collateral. The key point is that the plan gives banks an incentive to increase lending at the margin: They gain access to more low-cost funds by lending more.
Imagine the Federal Reserve wanted to do something similar. 
Yeah, I can imagine:


  1. Money for Nothin'.
    I'm holdin' out for the CHICKS!!

    I've got a concise description of Keynesians, but it's "R" rated

  2. Out of curiosity I surfed over to the Bank of England's site where the following statement leapt off the page underneath the heading of "Monetary Policy":

    "The Bank sets interest rates to keep inflation low to preserve the value of your money."

    Well, kids sure do say the darnedest things, and in this case it's another public confession of price fixing and market rigging. What's also amusing is that while claiming to be inflation fighters the B of E is preparing to increase inflation with its "Funding for Lending Scheme".

    Now, who would like to bet against the following prediction? If the scheme, or plan or project, is copied in the USA, the scheme will produce another round of windfall profits for the banks about which leftists will kick and scream even though the leftists will have supported the inflationary scheme from the very beginning?