"US central bankers should be jailed"

[WhiskeyGirl]

Strong opinions...

Yes, dear reader, central bankers are probably the biggest rogue traders of all. Remember Alan Greenspan? He has an opinion in the Financial Times today. We read it twice. Neither time did we discover anything new. He says the problem is fear. Until the fear diminishes...don't expect businesses to start many new projects or hire many new employees. Thanks a lot for that insight, Alan.

Alan Greenspan is probably more to blame than any other human being for today's financial crisis. He made a huge bet and put the whole world economy at risk. He bet that he knew better than the market. He put the Fed's key lending rate below the rate of consumer price inflation...and left it there for 4 years. Over $12 trillion was lost - in America alone. Where's the jail cell waiting for him? Where's the $12 trillion fine?

And now central bankers are betting big again...BIG...and they risk not only putting the 140,000 employees of Societe Generale out of work...but hundreds of millions of other people all over the world.

Central bankers are betting that they can add billions in QE money to the world's money supply, without causing a calamity. Maybe they can. Maybe they can't. It's never been done before.

But every previous experiment with paper money has ended in disaster. Paper money never survived an entire credit cycle. When credit was expanding, people were happy to take the paper. When it shrank, they became fearful of the paper and wanted something more substantial. Paper money always ends up worthless.

Where's the jail cell waiting for Bernanke? Who's going to fine him $10 trillion? How's he going to pay?

So cheer up, Jerome. You might be able to pay your debt to society with a postage stamp... We have in our wallet a 10 trillion dollar note from Zimbabwe. Why not a 10 trillion dollar note from the US? We're not predicting it...we're just trying to keep the young man's hopes up. And you never know...

http://www.equitymaster.com/dailyreckoning/detail.asp?date=10/7/2010&story=1