If it is the first responsibility of the Federal Reserve to protect the dollars that Americans earn and save, is it not dereliction of duty for the Fed to pursue a policy to bleed value from those dollars? For that is what Chairman Ben Bernanke is up to with his QE2, or "quantitative easing."
Translation: The Fed is committed to buy $600 billion in bonds from banks and pay for them by printing money that will then be deposited in those banks. The more dollars that flood into the economy, the less every one of them is worth.
Bernanke is not just risking inflation. He is inducing inflation.
He is reducing the value of the dollar to make U.S. exports more competitive and imports more expensive, so that we will consume fewer imports. He is trying to eliminate the U.S. trade deficit by treating the once-universally respected dollar like the peso of a banana republic.
Sarah Palin has nailed cold what Bernanke is about:
