Mind-Numbing Stuff About the Fed, Money Supply, M3, and the Possible End of the World As We Know It
I'm not sure whether I think this is perfectly consistent with my fears about our ballooning debt and trade deficit and China's ability to threaten us with a "Debt Bomb" more destructive than any nuke, or whether it's tin-hat conspiracy nonsense.
Three points come to mind as I chew on this:
1. If the U.S. starts madly printing money, our overseas debt shrinks in real dollars. Creating hyperinflation this way would be a sort of economic, instead of nuclear, mutually assured destruction: if the Chinese start selling our bonds and cripple our economy, we print money like Weimar Germany and make the world's U.S. holdings worthless. It's actually not a stupid idea, at least no more than nuclear counterstrikes were -- if it's intended as a threat to keep the peace, and not actually implemented. But making such machinations secret by discontinuing reporting of M3 doesn't really make that threat more credible; it just makes it more likely, which is different.
2. The new Fed chairman is said to be less inflation-averse than Greenspan was. And now the Fed seems to be setting itself up to create inflation without public knowledge of its role. I'm sure that's just a coincidence.
3. Some people seems to be hell-bent on having the government start investing in the stock market, which would both prop it up and enable insiders to earn tremendous illicit profits by boosting the prices of specific stocks. Social Security privatization would have done this, but that's dead in the water. So, shortly afterward, the Fed Board sets up a mechanism that allows semi-governmental agencies to do the same thing, without public knowledge? That's a little scary.
I don't think there were two shooters in Dallas. I don't think there was a nefarious bulge underneath one of the airliners that hit the WTC. I don't think a cruise missile hit the Pentagon on 9/11, I'm not afraid of the Elders of Zion and I like my brother in law even though he is a Mason. In other words, I do not generally cotton to conspiracy theories. But I do know that the world is a complex place, and that conspiracies and plots do occur.
NeoProgBlog readers: please help me out here. I'm just a country lawyer/mediator, not an economist. Is there a story here?