Debt isn't the only problem Greece faces. Thanks to years of government spending and easy money, the Greek economy long ago turned away from true wealth generating activities and embraced a bubble economy instead.
Surprisingly, Marx and Lenin were occasionally insightful when it came to the problems and consequences of fiat money in the economy. In principle, they opposed unbacked currency. But of course, once communists seized political power, those principles went right out the window.
The Greek government has spent freely for many years to enrich itself and its special interests at the expense of taxpayers. And now, it is not the Greek politicians who will suffer, but the taxpayers who face a future of unending debt payments.
Despite massive policy stimulus in the United States, the US economy is now growing far more slowly than in past periods of monetary inaction from the central bank. Meanwhile, fragile economic bubbles are being inflated from China to Europe.
As usual, the former Fed chairman, author of many of our current economic ills, is confused.
The stability of the Eurozone is back in the spotlight this week amidst Greece’s talks with its creditors—which seem to be going nowhere good.
The euro is an inflationary fiat currency, but it’s apparently not inflationary enough for many profligate European governments that want their own local currencies so they can inflate even more, and use easy money to temporarily cover up many economic sins.
Ben Bernanke reveals more about his own views when he commented on the $10 bill controversy to replace Alexander Hamilton. Bernanke attacked Secretary Jack Lew's idea to replace Hamilton with a women:
Jonathan teaches some high school students on the subject of inflation.
