We’ve heard over and over again that the state can stimulate the economy by creating money out of thin air. Doesn’t matter where it goes, they say (although it usually seems to go to their cronies), just create that money and you’ll be out of the recession in no time! Isn’t that what we’ve been told ever since the financial collapse? Well, I have a question about that, one I’d really like the statists to answer:
Transcript below the fold.
Okay, this video’s not going to be very long, it’s just a question I have for statists who believe that if government creates money out of nothing and spends it in the economy then it’ll stimulate the economy and lead to economic prosperity. After all, isn’t that what we’ve been told for four years? Isn’t that what we’re continuing to be told even though the economy is still languishing after a total “stimulus” of twenty trillion dollars?
My question has to do with something that happened during World War II. The Nazis engaged in Operation Bernhard, which is probably the biggest counterfeit operation in history. The Nazis wanted to destabilize the British economy, so in 1942 over a hundred counterfeiters were given the task of making counterfeit Bank of England notes £5 and up that were as close to the real thing as they could get, to be used to inflate the currency.
They did a phenomenal job! From the type of paper that was used, down to the thickness of the ink, the counterfeit notes they made were indistinguishable from the real thing. They even cracked the serial number code: what range of serial numbers matched notes made in what year and so on. They were then laundered and used to buy imported goods and pay German secret agents. A lot of the notes were introduced into the British economy simply by sending agents in with suitcases full of money to live up the high life!
They did such a good job with the counterfeit notes that not even the Bank of England could tell the difference! They looked at notes that had the same serial number, and knew that at least one had to be counterfeit, but couldn’t tell which one! Technically, this meant that the counterfeit notes were actually genuine Bank of England notes, since the law defined a genuine Bank of England note as one the Bank of England would accept. And since they had no way of detecting the forgery, the Bank of England did indeed accept these! The bank declared these forged notes “the most dangerous ever seen.”
The Bank of England was forced to withdraw all notes £5 and over, and redesign them to prevent further damage to their economy.
So, here’s my question for all these statists barking on about money creation being stimulus: why did the Nazis try to destroy Britain by stimulating their economy? Why did Britain react to this as a danger, instead of saying “Oh thank you Germany for stimulating our economy and making us rich”? Weren’t the Nazis doing them a favor by creating money and spending it in their economy?
Why is it a most dangerous attack when the Nazis do it to Britain, but “stimulus” when our government and the Federal Reserve do it to us? Do you have an answer for this? Well? Do you?