Handing Out Money

Frederick J. Sheehan is the author of Panderer to Power: The Untold Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession (McGraw-Hill, 2009), which was translated and republished in Chinese (2014). He is researching a book about Ben Bernanke. He writes a blog at www.AuContrarian.com.

To be clear on the main point of "The Killing Fields": The world's central banks have been working for well over a year on handing out money to the people. Their intention is to avoid the intermediate step of operating through commercial banks. The Federal Reserve, for example, generates (through electronic dollar credits to the banks) "money" (as the word is used today) in operations between the New York Fed and the primary dealers. After these electronic dollars are credited to banks, the money does not always get lent out or go where the central banks would like. The central banks are trying to get legislation that will permit direct currency transfers to the people.