Since the speculation of Quantitative Easing (QE2) had begun back in August, many Chinese suppliers of printing presses started receiving a new flood of enquiries from the printers in China.
And in November, when Bernanke approved QE2 with his seal by specifying the figure as $600 billion of treasury purchases, Chinese manufacturers of printing presses have started receiving a flood of orders from the Chinese printers. In an interview to Reuters, Chi Min, the president of Printers' Association of China said that clients in the U.S., primarily the Federal Reserves, have asked for supplies of hundreds of billions of dollars from this very month itself, on top of the earlier orders. Mr. Min further reported that this additional demand has also created a new demand for experienced or fresh hands in printing industry in China. 'The demand is unprecedented', Mr. Min supposedly stated to the Reuters reporter.
As per the mainstream media, Bernanke wanted to go for QE2 to stimulate the slowing U.S. economy. Unemployment rate in the U.S. is hovering around 10%, sort of unprecendented in recent times.
However confidential sources, coming out only now and first reported in The Spoof show that Bernanke actually hoped that printing money would at least create a few thousand jobs in the U.S., both for the printing machine industry and for the printers. The Fed. also expected that printing $600 billion would create another few hundreds of jobs with paper manufacturers. An FOMC member, present in that meeting of Nov. 2-3, who has been unsuccessfully trying to get a job with The Spoof for last several months as The Spoof pays in gold and not with fiat dollar, leaked this piece of information to The Spoof from the yet to be released FOMC comments from its November 2-3 meeting. The FOMC board member also mentioned how Bernanke confided the real objective of QE2 to the other members. According to this source, Bernanke himself didn't believe in any of the noises on QE2 in mainstream media. The FOMC never discussed the stimulating impact of QE2 on the U.S. economy nor did it discuss the inflationary impact of it through devaluing dollar following the currency war hype of media with China. Bernanke didn't believe in any of these theories with merely $600 billion drops of water on the ocean. It was all about printing $600 billion notes!
Bernanke's core objective was to create a few thousand jobs in the U.S., who would directly or indirectly be engaged in the printing process of these dollar-bills. To achieve this objective better, Bernanke favored printing lowest denomination of dollar bills for the QE2. Bernanke even assured of new jobs in printing industry in the U.S., back in July, when he delivered a keynote address on 'Keynesian School of Thought on Role of Employment in the Printing Industry to Kickstart an Ailing Economy'. It's all about jobs, jobs in printing dollars. Period.
However lack of knowledge of economics along with lack of knowledge of how dollars actually get printed in the U.S. supposedly backfired on this decision of Bernanke. The Federal Reserves have outsourced the job of printing dollars to the Chinese printers since long, to gain efficiency and cost advantages. It follows the same process as Nike follows. Nike uses Michael Vick in its ads to get more U.S. buyers, but get the job done in China producing more jobs there; similarly George Washington gets printed in the land of the Mao.
However Bernanke was ignorant of this vital piece of information, other than being ignorant on many other trivial things like monetary policies, global economics, etc.
The trouble started hereafter. Representatives of printing industry who were present during the seminar on 'Keynesian School of Thought on Role of Employment in the Printing Industry to Kickstart an Ailing Economy' this week enquired with Bernanke on his promise of job creation in the industry. Bernanke enquired back with his team at Fed, and hell broke lose. Bernanke was briefed that orders have already been sent to the Chinese printers. Misunderstanding the context of Bernanke's query, the Fed. team in charge of delivering the dollar bills also informed Bernanke that they have relaxed the specifications this time, to ensure speedier delivery.
Bernanke apparently was at a loss for words for a few moments, but then asked his officials to contact Congress to look at anti-dumping provisions against Chinese manufacturers. The printing industry of the U.S. has also been demanding same independently, following tyres and tubes and steel industry - and what not.
Confidential sources state, till information last came in, that the immediate purchase of tresuries with dollar-bills may therefore get postponed indefinitely. Mainstream media got the whole causality wrong when it stated that long term treasury yields are rising because markets believe Fed. will not succeed in driving down long term interest rates. The real reason has been a postponement of QE2 due to above developments.
Timothy Geithner has been briefed on this, and he informed The Spoof (to get a job that pays in gold) that President Obama would use this development to mollify the Chinese during the G20 meetings at Seoul.