| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| The Big Bank Theory | ||||
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PELLEY Is that tax money that the Fed is spending?
BERNANKE It's not tax money. the banks have-- accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. so it's much more akin to printing money than it is to borrowing.
PELLEY You've been printing money?
BERNANKE Well, effectively. And we need to do that, because our economy is very weak and inflation is very low. when the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation.
OK, let's fast forward to Decmeber 2010:
Bernanke: "One myth that's out there is that what we're doing is printing money. We're not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we're doing is lowing interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So, the trick is to find the appropriate moment when to begin to unwind this policy. And that's what we're gonna do."
This is why we need Ron Paul chairing the monetary committee in the House, but as you may know by now, John Boehner is trying to keep that from happening so we can continue down this path and give Bernanke free reign to lie to the American people.
