America's Hank Paulson to Weimar's Freidrich Ebert: "You ain't seen nothin' yet!"

From the NYTimes (By EDMUND L. ANDREWS):

The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they will print as much money as needed to revive the crippled banking system....

"they will print as much money as needed"

From Wikipedia:

The government printed money to deal with the crisis; this allowed America Germany to pay China for Iraq war loans and reparations with worthless dollars marks and helped formerly great industrialists to pay back their own loans. This also led to pay raises for workers and for businessmen who wanted to profit from it. Circulation of money rocketed, and soon the Americans Germans discovered their money was worthless.

Btw, that's excerpted from a to-be-written piece on the history of 2008 America piece on the history of the Weimar Republic.

The NYTimes continues:

All told, the government has assumed at least $7 trillion in direct and indirect financial obligations in the form of Wall Street bailouts, emergency lending and government guarantees on bank deposits, inter-bank loans and home mortgages.

Our national budget is $3 trillion. Our GDP is $14 trillion.

At first, I thought Paulson and Bernanke may have actually believed the Bear Stearns, Fannie/Freddie bailouts may maintain a semblance of a free market. But at this point, I find it hard to believe that they can believe their own fairy tale.

Monetary policy matters. Too bad Bush / Obama refuse to allow any alternative* viewpoints to be considered in those policy decisions.

Tim White

* alternative [awl-tur-nuh-tiv, al-] - (adj) - meaning rational, clear-thinking