Friday, August 10, 2007

Helicopter Ben

Here is a quote from Helicopter Ben Bernanke.

..."people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."

It was always clear to me that the government, with all its debt, would always prefer inflation over zero inflation. What has been confirmed today is that the Fed is absolutely petrified of even the slightest threat of deflation.

Rates will be cut! The dollar will be trashed! I'm betting that gold will be benefit. It won't be because of inflation, it will be from a fear of financial collapse.

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