The last five cents

Quote of the day:

Throughout history, once a nation embarked on the inflationary route, there has only ever been one final outcome: total destruction of the currency. Since 1913 the Fed, (supposedly created to protect the US dollar - must read: 'The Creature of Jekyll Island"), has managed to destroy 95% of the purchasing power of the dollar. Does anyone really believe the remaining 5% is safe?

The answer to that question, according to Ben "helicopter" Bernanke, seems to be "no."

The Federal Reserve is providing $20 billion in loans to banks as part of an unprecedented auction process to ease a global credit crisis and make sure financial institutions can keep lending to their customers.

The central bank on Wednesday announced banks' use of a new auction facility that was created to encourage banks to seek cash directly from the Fed to help them overcome credit problems.

And where does the Fed get the money to loan banks? Why, by printing it out of thin air, of course! The willy-nilly creation of fiat money is what causes inflation, far more than any market force could. The economic sounds you hear around you is that last 1913 nickel gasping for breath...

UPDATE: the cash printing press apparently isn't enough to stop the fire sale of the U.S. economy. In addition to Dubai snapping up 11% of Citibank recently, Morgan Stanley just sold a 9 percent stake to an investment fund run by the Chinese government.