On Money Printing...

Ben Bernake swung by Jacksonville to drop some enlightenment on our future printing press operators economists. One of his statements had me waxing nostalgic for Ace Ventura's response when presented with
"dubious" information. "Re-he-he-heaalllly?"
Bernake speaks in Jacksonville
"Bernanke defended the Fed's decision earlier this week to buy $600 billion in government bonds to push interest rates even lower. Some critics worry that the move will be inflationary."
"Sometimes you hear the Fed is printing money. That's not happening," he said.
So... we just had $600 billion laying around in reserve for a rainy day? Just like we had $1.7 trillion laying around in March of 2009? Hmmm. To quote Desi Arnaz Ben, "Lucy, you've got some splainin' to do!" The world bank chief is calling for a new gold standard based currency, as nations are losing faith in the U.S.peso dollar.
"Gold briefly hit a record high of $1,398.35 an ounce in early trade on Monday on concerns of a continued weakening dollar trend after the U.S. Federal Reserve last week acted to resume buying Treasuries.

SUMMIT ACRIMONY?
That policy has fed acrimony among leading economies in the Group of 20 in the run-up to their summit in Seoul on Wednesday and Thursday.
China and Germany, major exporting nations, have both decried the Fed's quantitative easing -- effectively printing money -- which is weakening the dollar."
China, Russia slam Fed move
Washington has frequently criticized China, saying it deliberately undervalues its currency to boost exports.
China says the United States, via the Fed, is engaged in the same thing that it stands accused of, and some emerging nations have already acted to curb their currencies' rise.
Resentment abroad stems from worry that Fed pump-priming will hasten the U.S. dollar's slide and cause their currencies to shoot up in value, setting the stage for asset bubbles and making a future burst of inflation more likely.
"As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets," Chinese Finance Vice Minister Zhu Guangyao said on Monday.
The Fed's quantitative easing policy was unveiled last week to jeers from emerging market powerhouses from Latin America to Asia. Russia renewed its assault on Monday.

The Dollar has the had the same trajectory as the Titanic post-iceberg since 1985, losing a whopping 55% of it's value, with two huge downdrafts in March of 2009 ($1.7 Trillion in "reserves") and August 2010 (We still have at least $500 billion in "reserves" Jackson Hole speech). Every finance minister from sea to shining sea is blasting the Fed for printing money. Ben says he's not printing money. Hmmmmmm...

Addendum: 12/9/10
Hey don't take my word for it...take BEN's word for it! (Thanks John Stewart!)

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
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“The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
—John Maynard Keynes

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Currency Wars

While the majority of people are focused on the November 2 elections, the stock market is focused on one thing only: 2:15 PM Eastern time November 3rd. Why? That's when Printin' Ben Bernake announces the size of the latest "Quantitative Easing". Our monetary masters prefer the fancy term for printing money the same way your neighborhood garbage man prefers "Sanitation Engineer".
Problem is, the rest of the world isn't planning on letting us print our way out of this mess. ECB to respond in kind as FED weakens dollar On Nov. 3 at about 2:15 p.m. in Washington, the Fed will release its policy decision. About 18 hours later, at noon in London (8 a.m. in New York and Washington), the U.K. central bank will announce its move. The ECB will go public with its decision 45 minutes later, at 1:45 p.m. in Frankfurt (8:45 a.m. in New York). The Bank of Japan concludes its talks on Nov. 5 at about noon local time (11 p.m. in New York).

They have printers too and by golly they're prepared to use them...not to help unemployment as Ben says but simply to offset the Fed. Check and Mate. The losers in this will, of course, be anyone who doesn't make enormous amounts of money (the bottom 90% of society) as central banks flush their paper currencies down the toilet. Maybe Printin' Ben is due for a new nickname. The Trillionator. Hasta la Vista, dollar.

Currency War escalates
Dollar drops most in 4 weeks on Fed move
U.S. Dollar Index breaks long-term support
Spend and Pretend strategy pummelled by G20

Nov 8th Addendum: The stock market reaction to Ben's widely expected and anticipated move on Wednesday was...nothing. The market closed marginally up on Wednesday. You usually get a "sell the news" reaction to such an anticipated event...everyone knew it was coming. What everyone DIDN'T know was the reactions of all the foreign central banks. By Thursay morning, the verdict was in and no other central banks were firing up the presses...yet. I believe this is why you had the tremendous gap up Thursday and technical breakout. "They ARE going to let us print our way out of this!" thinks Mr. Market. We shall see. Ponzi on for now, Wayne. I also found this excellent article by Andy Xie on the inevitable end-game of currency wars:

TO HELL THROUGH QE