In my previous post on this subject, I noted that the US government just printed $15.2 trillion in new money. It used that money to bail out the insolvent banks and financial firms. Specifically, it used that money to buy up $15.2 trillion worth of crap mortgage securities that were on their books. So it bought $15.2 trillion worth of worthless garbage. How did the government come up with $15.2 trillion to bail out the banksters? It simply printed the money, that’s what it did!
Now, in my previous post, I asked why printing $15.2 trillion did not cause inflation, recession, messed up balance of payments, etc. It didn’t cause any of these things. None of my commenters even answered the damn question. All they did was tell me that printing money causes inflation, recession and bad balance of payments. Did they answer why it didn’t in this case? Nope. So I’m going to keep on asking you guys the question. Ok?
Why didn’t it cause any of these things? Is it because we traded the money for $15.2 trillion in assets, and therefore did not really increase the money supply? If we printed $15.2 trillion more, and instead used it to pay off the national debt, something which I may well advocate, why would this cause inflation, recession and bad balance of payments if the previous printing round did not?