Ben Bernanke was villified as the man who continued to “print money” in the years following the financial crisis of 2007, and rightly so because printing money only worsened the economic situation. The problems facing the US have nothing to do with a lack of money or the economy, but with toxic levels of debt amid a dollar based on a pyramid-scheme of debt that cannot mathematically be paid off by its very design more than a century ago with the Federal Reserve Bank.
All that the Government and Bank (because the Federal Reserve is a private corporation) can do is to print money to solve the country’s problems. That is what Bernanke did- he printed money, and the Federal Reserve continued to print money for eleven years, and by doing such, injected cash into the economy to give it the appearance of being real when it really was fake. It is no different than the woman who gets injections or implants in her breasts to have a larger and larger chest- the reality is that her chest is a certain size, but the implants make it look bigger when it really is not, and they can only be injected or get bigger implants so many times before they explode and cause medical damage or kill her. In the case of the economy, it means economic decline to the point of a complete economic crash and with that an ensuing political crisis.
With that, CNBC reports that Ben Bernanke has said that in light of the coming “Trump Stack”, he expects to see a sharp economic decline followed by a “quick rebound”.
Former Federal Reserve Chairman Ben Bernanke sounded an optimistic tone on the longer-term state of the economy, predicting in a CNBC interview that while the U.S. is in the midst of a sharp recession, it shouldn’t last.
“It is possible there’s going to be a very sharp, short, I hope short, recession in the next quarter because everything is shutting down of course,” he said.
“If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound,” Bernanke later added.
Bernanke spoke Wednesday to CNBC’s “Squawk Box.”
During the financial crisis that exploded in 2008, Bernanke guided the Fed through its efforts to save the economy. He was the first central bank chair to pull its benchmark interest rate down to near-zero, and the Bernanke Fed implemented a slew of programs that have been resurrected to deal with the current crisis. (source)
Bernanke’s analysis is correct. What he is not telling you is that there will be rising prices long-term, and that these checks will only speed the economic decline of the country because the issue always was and still is the debt.
Printing money only devalues the worth of the money itself. When this happens, the money becomes worth less, or worthless.
Former Fed Chairman Alan Greenspan has said before that the US can pay any debt she wants to because she can print the money to pay it. However, this comes at a cost, which is the same for all countries, and is the eventual hyperinflation of the currency just as what happened in Weimar Germany. What good is a dollar when it is printed (on paper or a screen) so much that it cannot purchase anything any more, since the prices of goods and services will be forced to rise (in order to preserve their value amid a declining currency) to the point where people cannot buy them in a reasonable way?
This is the real danger of the “Trump Stack”, for while it will politically appease people and make stock prices rise, it will cause a long-term depression, let alone the immediate short-term one that Bernanke is warning about. Eventually, there will have to be more checks, and possibly at some point, as some people have joked, “helicopter money” where the government starts throwing money out of helicopters because it will be so worthless and people will need so much of it to buy basic items.
It may be a joke, but the comedy is becoming reality, and that is not funny.
This is another reason why I warn that now is the time to look at vehicles of preserving value, because the value of your money itself is in decline, and while it has been for a long time, printing “Trump Stacks” will only speed it up. This is not a political issue, but one of monetary policy, that will make some people very rich if they have their assets parked into stores of value, but which will impoverish many if they do not do this.
What good is ten million dollars in 2025 if it only has the value of a million dollars per 2020 standards?
This is the exact concern here. It is not a numbers game, but one of debt and value. The government is making it into a numbers game to keep the people happy, while ignoring this other reality because it is far more painful and politically destructive.