Who Will Clean Up After “Helicopter” Ben?
Rapid increases in the money supply lead to higher inflation, which in turn, robs consumers of their purchasing power and savers of their wealth. Workers’ expectations for higher inflation leads to demands for higher wages, and businesses try to pass these wage increases on to consumers by raising prices. It’s a vicious cycle that can lead to hyper-inflation. If prices rise much faster than wages, such as we’re seeing today, it could deal a major blow to the economy, and political change. “As I have stressed already, the prevention of deflation remains preferable to having to cure it. If we do fall into deflation, (ie lower housing prices) we can take comfort that the printing press can assert itself, and sufficient injections of money will ultimately always reverse a deflation,” Mr Bernanke said in his infamous “Helicopter” speech, presented in November 2002. “The US government has a technology, called a printing press that allows it to produce as many US dollars as it wishes at essen
