The Point of No Return for Quantitative Easing is Getting Closer

Did Ben Bernanke and Haruhiko Kuroda discuss helicopter money?

by Ivan Martchev
Market Watch

On Nov. 21, 2002, Federal Reserve Board Governor Ben Bernanke gave his infamous “helicopter” speech titled, “Deflation: Making Sure “It” Doesn’t Happen Here,” before the National Economics Club in Washington, D.C. The speech raised eyebrows. The most notable part has been quoted often:

“What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But 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.”

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