• Richard Duncan for The Daily Reckoning
Singapore, Singapore – Perhaps the greatest mystery in the world of finance and economics is why Fed Chairman Ben Bernanke refuses to acknowledge that paper money creation by central banks produced the “global savings glut” which, according to him, destabilized the global economy and led to the crisis of 2008.
Six years ago, Bernanke unleashed his Global Savings Glut (GSG) theory on the world. Since then, he has made numerous other speeches touching on this subject, including one last month in Paris. With each speech he came a little closer to admitting the obvious, but in every case he holds back, as if not at liberty to discuss the secret money-making powers of central bankers.
The basic gist of GSG is Asians, and oil exporters, save more than they wish to invest in their own countries and they choose to invest the surplus in the United States because of attractive returns. Those capital inflows into the US, he claims, push up US asset prices and push down US interest rates, le
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