Federal Reserve Branch Refuses to comment on charge of money printing "under the table"

Upon receiving the news of former St. Louis Fed President William Poole's comments, which appeared on Bloomberg Television and Bloomberg characterized as to "announce to the world," that the Fed is printing money (presumably under the table), I decided to get a comment from the Denver Federal Reserve Branch. The Denver Federal Reserve Branch is a part of the Kansas City Reserve Branch and thus their Public Relations director Bill Medley is based in Kansas City. He had no comment concerning, the former Director's comments, which will no doubt fuel a story that will be huge overseas even if it is ignored in the United States.

It is hard to overstate what a game changer this news is. This is a chilling prospect to the Chinese and Saudis particularly, as they have always feared the the US might inflate its way out of debt and leave them holding the bag. Indeed the one thing the US has sold the most of in recent years is, in fact, its debt. If we were to telegraph to the world, as Poole has done, that the US is likely intending to inflate its way out of that debt, world financial markets might well go beserk. Certainly it would be a great thing for the gold bugs, and for cities such as Denver who would profit from a vast resurgence in gold and other precious metals mining, but the downside is, of course, the best example in history of a nation inflating its way out of debt, the Weimar Republic.

For those in need of the history lesson, at the end of the First World War, France and England especially imposed war reparations on defeated Germany (the Weimar Republic). While the most cited example that the inflation that followed required a wheelbarrow full of money to pay for a loaf of bread may have been exaggerated, the social dislocation that followed which led to the rise of Hitler, cannot be.

While the implications of all this have yet to be entirely appreciated, it does indeed seem like the most dire economic news for the world this year. While the news was totally expected by most economic analysts at some point, few likely expected it would be broken in such a manner or so soon.


http://www.examiner.com/examiner/x-1863-Denver-City-Buzz-Examiner~y2010m8d10-Den...

http://seekingalpha.com/article/113801-poole-the-fed-is-printing-money