‘Helicopter Ben’ Isn’t Coming In For A Landing

IBD's Capital Hill ^ | 2/24/2010 | Ed Carson

[Slyscribe]

Fed Chairman Ben Bernanke reassured investors Wednesday that the central bank won’t raise ultra-low interest rates any time soon. Policymakers last week hiked their largely symbolic discount rate, but stressed that did not signal a change in policy. Bernanke said he expects the nascent recovery to remain modest, keeping unemployment high.

Others worry the expansion already is faltering. New-home sales plunged 11.2% to a record low in January,

[Da Coyote]

Is there a single Obamaloon official who could purchase a single clue with a winning lottery ticket?

[semantic]

We as a nation (globe, actually) are faced with two choices:

(a) Take the bitter debt-deflation tsunami today. In this case, home prices would collapse another 80%, and all pension & gov't social services would be rendered null & void as their investment portfolios would hold nothing but the worthless pieces of paper of bankrupt entities. OR ...

(b) Kick the can a little further down the road in the misguided hope than something, anything will turn up to save our collective bacon. (Also known as 'extend & pretend'.)

Which one do you think will be chosen every time? Imagine you were faced with a job loss, insurmountable debts and imminent eviction. Now, what if someone was crazy enough to keep giving you "money" for simply writing 'IOU' on a scrap of paper? And not just once, but for weeks, months, years in fact? You, me and everyone else would keep on writing those IOUs!

We as a species may talk a good game about having longer-term horizons, but the fact is we all engage in short-term thinking. Governments are simply an aggregation of this individual behavior.

Ben will print until there's open warfare in the streets.