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Last night the news show 60 Minutes aired an interview with the Chairman of the Federal Reserve, who expressed clear concern that all the government spending and all the federal reserve money printing so far might not be enough:
Reporter: “In terms of stimulus, has Congress done enough?”
Fed Chairman: “. . . I don’t think we know the answer to that. It may well be that the Fed has to do more. It may be that Congress has to do more.”
The interview was pretty extraordinary– the Fed Chairman didn’t bother sugarcoating what they’re doing–
Reporter: “Fair to say you simply flooded the system with money?”
Fed Chairman: “Yes. We did. That’s another way to think about it. We did.”
Reporter: “Where does it come from? Do you just print it?”
Fed Chairman: “We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds for other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.”
Reporter: “In terms of size, Mr. Chairman, how does what the Fed is doing right now compare to the unprecedented action it took in 2008?”
Fed Chairman: “So the things we’re doing now are substantially larger. The asset purchases that we’re doing are a multiple of the programs that were done during the last crisis. . .”
That is the US Federal Reserve Chairman saying they just print dollars out of thin air, oops I mean digitally. No wonder gold is on the cusp of breaking out to all time highs.
