Ben Bernanke in 2002 on Money Supply
"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. "
On July 13, 2008
"The Board of Governors of the Federal Reserve System announced Sunday that it has granted the Federal Reserve Bank of New York the authority to lend to Fannie Mae and Freddie Mac should such lending prove necessary. Any lending would be at the primary credit rate and collateralized by U.S. government and federal agency securities. This authorization is intended to supplement the Treasury's existing lending authority and to help ensure the ability of Fannie Mae and Freddie Mac to promote the availability of home mortgage credit during a period of stress in financial markets."
FRB Press Release
From Marketwatch,
"At the moment, each company may borrow only $2.25 billion."
"But the agencies have grown to mammoth size. They own or guarantee $5.2 trillion of U.S. home mortgages. "
"Peter Schiff, president of Euro Pacific Capital, predicted that the package would put downside pressure on the dollar. He said letting the two firms collapse was preferable to a bailout and said the package announced amounted to sticking a finger into a leaking dam that was going to burst one way or another."
Jim Roger on Fannie & Freddie
LET'S GO IN PAST FOR A MOMENT & HEAR FROM x FED RESERVE CHAIRMAN GREENSPAN that "Excess money causes inflation."
Fed × FNM × FOMC × FRE × Peter Schiff
Fed is gonna lend to Freddie & Fannie
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