New Fed Charmian favors positive inflation

Thanks to Jeff Tucker (scroll down) at the Mises Blog for reminding us of this quote from Ben Bernanke, Bush’s pick to succeed the Maestro at the Fed:

“The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

Positive inflation? Isn’t that like positive cancer? Yet within minutes of his appointment, I heard the talking heads praising Bush’s brilliant appointment, some even calling Bernanke the “anti-Miers” because all will praise his nomination.

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8:04 pm on October 24, 2005