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Saturday, November 10, 2007

Helicopter Ben

Helicopter Ben, noun: A derogatory nickname for Federal Reserve Chairman Ben Bernanke. In 2002, when the word "deflation" began appearing in the business news, Bernanke gave a speech about deflation. In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press". In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation." (Definition courtesy of Wikipedia.)

For why this is problematic (and for what is one of the best-- if slightly overblown-- explanations of our current economic debacle I've read) See Here

Also, President Sarkozy warns of ‘economic war’ as dollar falls to new low


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