Asia Sentinel, 19 Jan 2009, Peter Schiff
This week, in a speech before the London School of Economics, US Federal Reserve Chairman Ben Bernanke offered a perverse economic theory in his quest to gather support for never-ending Wall Street bailouts; "This disparate treatment, unappealing as it is, appears unavoidable. Our economic system is critically dependent on the free flow of credit, and the consequences for the broader economy of financial instability are thus powerful and quickly felt."
In other words, credit is the lifeblood of the American economy, and the continued operation of credit providers is an issue of national security.
In truth, not all economies run on credit. But over the last decade, the United States became a bubble economy that needed unlimited credit to keep from collapsing. In a legitimate economy, it is not credit that fuels spending and investment, but simply income and savings. It's too bad the Fed chairman does not understand the difference.
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