The House Financial Services Committee witnessed a classic confrontation July 21 where the redefinition of a word was finalized. The confrontation happened between free market Congressman Ron Paul (R-Texas) and Keynesian Federal Reserve Bank Chairman Ben Bernanke over the definition of inflation. Congressman Paul noted that “inflation is an increase in the money supply,” as indeed the term had classically been understood.
Even the mass media is starting to take notice of the longtime cozy relationship that both the U.S. Treasury Department and the Federal Reserve Bank have with Goldman Sachs, a major Wall Street bank holding company and Democratic Party donor.
Capital lending firm-turned-bank holding company CIT has patched together another $3 billion private loan to avoid bankruptcy and try to complete the transition to bank holding company.
Federal Reserve Chairman Ben Bernanke is on a public relations offensive to persuade Americans that he has the economy well in hand, and that he has an “exit plan” for the Fed's inflationary monetary policies if consumer prices should start to rise precipitously. Bernanke does see a time when banks are lending more freely, and the fractional reserve system for banks would again put additional inflationary pressure on the economy.
Our politicians in Washington (especially the Obama administration) are following the economic policies of Federal Reserve Chairman Ben Bernanke, who made these economic predictions over the past four years (YouTube Video):