RUSH: Janet Yellen — who will become the next chairman of the Fed, theoretically — is in favor of the current policy. She’s in favor of more printing of money and keeping interest rates low, and Larry Summers, who pulled himself out of the running for it, was the one who was going to end the printing of money. The quantitative easing, QE, whatever it is — it’s three we’re on now — and get interest rates back up. I had the two reversed.

I was misinformed by a self-professed market expert. Anyway, my bad. I got ’em reversed. That’s why the market’s doing well today. It is because the priming of the stock market pump is scheduled to continue unabated if this Yellen woman ends up being the chairman of the Fed. Now, I’ll give you the stats on all this quantitative easing. It’s basically $85 billion a month. What it is, is they’re not really printing the money.

They just digitize it. They change the figures in the ledger, and they’re just adding money to certain accounts where they know the money is going to be spent on buying stock, essentially, investing in the markets. This is from the Financial Times: 40% of quantitative easing benefit has gone to the top 5% of income earners at the top of the wealth chart, including bankers. That’s who has benefited.

The reason for this, once again, is style points. The Regime knows that every day, day to day, economic activity is moribund. I mean, it’s static, squalid. There isn’t anything great happening on Main Street. There is no rising wages for people. There is no massive job creation. In the economy at large, there isn’t anything happening on the growth side. But the Regime wants it to appear all right, so the stock market has been the beneficiary of almost half of this quantitative easing.

It’s been used to elevate activity in the stock market and to increase the daily Dow Jones Industrial Average, which then makes it appear that everything’s hunky-dory in the economy. It is kind of strange because the Democrats heretofore, prior to all this, have always been the ones saying what happens in the stock market is not the real world. “That’s just the rich! That’s just wealthy! The stock market does not mean Main Street.” Now they’ve done a 180 because everything is image; everything is style points.

If you have an economy that’s squalid and just basically going along at an unremarkable pace, you have to make it look like there is a burgeoning, growing economy, and that’s what QE whatever — we’re on number 3 — really has been all about. So the chairman of the Federal Reserve, that position is highly, highly crucial. Larry Summers, who took himself out of the running, wanted to end all of this because it isn’t real. The Federal Reserve is… I forget the exact number.

Adding all the quantitative easing up, QE1, QE2, QE3, since 2008, since the financial crisis, the amount of money that they basically created out of thin air, just printed, or digitized and added to financial ledgers, is over a trillion dollars that has no basis in reality. There’s been nothing that has happened that would have produced it. There hasn’t been any economic activity undergirding it. There’s no reason for it to have happened.

But the Fed can do this. They can print it. They can add it wherever they want. They can add it to the money supply. They can give it to put it in accounts that end up being active in the stock market, and the theory has been — guess what? — that that will trickle-down. I’m not kidding. The theory has been that it would trickle-down — which, of course, I’ve always been told the Democrats were opposed to trickle-down.

They didn’t believe it, of course, when Ronaldus Magnus instituted it. But this doesn’t have a chance to trickle-down. What the Democrats are doing here, what the Fed is doing, what Obama’s doing is what they always accused Reagan of doing, but this is nothing like what Reagan did. The trickle-down that they accused Reagan of engaging in, that they say didn’t happen, simply was tax cuts.

People in the private sector, all over the private sector ended up with more money in their back pockets. Not just 5% of the population. Today, 5% of the population is getting the economic growth in this country, 5% of it, and it’s a closed universe in which these people operate. It’s not small businesses getting money and using it to invest and grow and hire people. That is not happening.

In fact, what’s happening in the real world, as you well know, is that full-time workers are being converted to part-time workers so they can afford to stay in business because of Obamacare. Well, that’s not a concern for the people getting the QE3 money. That $1.5 trillion is the grand total of, essentially, printed money. In fact, it’s worse than that. Since the financial crisis… I was reading something over the weekend about the financial crisis and a five-year look back at it.

The overall amount of priming that the federal government and the Federal Reserve along with several other central banks all over the world have done, the amount of money that they put in to the global economy… What was it I heard? It’s $18 trillion, and that’s just the US number. That’s what it is. It’s $18 trillion all told for $1 trillion worth of growth. So in order to get $1 trillion of economic expansion in the past five years, the Fed has spent $18 trillion. It’s been classic Keynesian economics.

You know, people like Paul Krugman run around saying, “We haven’t spent nearly enough.” We’ve spent more than anybody knows! It just hasn’t all come from the federal government and been distributed like Obama wanted everybody to believe it was gonna be. We basically have bailed out financial institutions, we’ve bailed out automobile companies, we’ve bailed out unions. We have bailed out $18 trillion worth — and, remember, this was done to prevent a global economic disaster.

Remember, we had to do this in 24 hours or the world economy was going to collapse. You know, there was a TV show that aired I think Thursday or Friday night on the Discovery Channel, and I made a mistake of only TiVoing the first two hours. It was called The President’s Gatekeepers, and it’s about the various chiefs of staff. I got hot under the collar watching this.

The way that this show portrayed the Clinton chief of staff and the Jimmy Carter chiefs of staff, and even the Obama chiefs of staff? Great! The Reagan chiefs of staff all had to control a basic idiot. The Reagan chiefs of staff were all sitting there talking about what a mistake Reagan was gonna make here, what a mistake Reagan was gonna make there, how they had to go in and speak truth to power, and they had to go in and tell Reagan the truth. But all these other nitwits for these absolute disasters of a president?

Their chiefs of staff were out there singing their praises, talking about how great they were, but the segment that we got in this show on chiefs of staff and the economy in 2008, the financial collapse is where I’m getting some of these numbers of $18 trillion and what a valiant effort it was. It was Hank Paulson who was the Treasury secretary at the time. I donÂ’t know if you people might have heard about this or TiVoed it, and I didn’t see the last two hours, but the first two were enough.

Oh, the heroic yeoman effort that everybody put together in the end of 2008 to save the world economy. Even had the Bush chiefs of staff. In that instance, they had to make the point, “Yes, we had to convince the president to go against every principle he had in order to save the world economy. The sum total of this thing — and it was really subtle, folks. The Discovery Channel was very subtle.

But if you watch this, what you came away with was that Republican presidents are blithering idiots saved by inside-the-Beltway insiders acting as chiefs of staff who protected them (and us) from their natural instincts, Reagan and Bush. Bush 41 kind of got a pass, because he had the good sense to lose to Clintons in ’92. So he didn’t get ripped. But Reagan won twice, and Bush won twice, so they had to get shredded — and they did.

On the other hand, the Democrat chiefs of staff and the Democrat presidents — it’s all very subtle — why, panacea, Why, they were best and brightest minds. Even LBJ, who was accurately reported as being an absolute disaster as a president when it came to the Vietnam War, nevertheless he came out shining through for his Great Society programs, and all these chiefs of staff were talking about how great and wonderful he was.

Every time a mistruth or something very misleading happened on TV, I would pause it and I would practically start screaming, and Kathryn would say, “Okay, look. You know what? Why don’t you just leave? I’m gonna watch the rest of this.” She got so irritated, I was stopping it every 10 seconds. But it was really subtle, and I remember how this show dealt with the financial crisis of 2008, and it was all just the best and the brightest and the smartest, and we were all saved.

The bottom line was, folks, that $18 trillion was created out of thin air — $18 trillion. I mean, this doesn’t even get lopped on to the national debt because this is not money authorized by the federal budget by US Congress. This is just the Federal Reserve just decided to print money wherever they wanted and send it wherever they wanted, all ostensibly to save the world economy. All it did was bail out the best and the brightest from the mistakes that they had made.

They had the power and the ability to insulate themselves, and they let Lehman Brothers go as sort of like a sacrificial lamb, and because nobody liked the guy that ran the place. Dick Fuld, they didn’t like the guy. Even today, if you read stories about the guy that ran Lehman Brothers, he’s a big brute. He was mean, and people didn’t like him. So, they let Lehman Brothers go. So they made a movie about it, called Margin Call, that I’ve mentioned to you on this program.

BREAK TRANSCRIPT

RUSH: It’s $18 trillion. The G7 nations borrowed $18 trillion since the financial crisis and have only $1 trillion in economic growth to show for it. That’s it. That’s what it’s bought us. There was $18 trillion borrowed, and a lot of it’s gonna be forgiven and not have to be paid back. By the way, if you want to know what happens to that money, say hello to tax increases down the line.

That money’s gotta be paid for somewhere, somehow, someday, by somebody. So all of this so-called financial, monetary expansion that is not rooted in any substantive economic growth, is gonna have to be paid for, or we default or something

BREAK TRANSCRIPT

RUSH: Matt in Gig Harbor, Washington. You’re next. Welcome to the program.

CALLER: Thanks, Rush. Matt in Gig Harbor, Washington. I want to talk briefly about student loans here, Rush. Basically, I think they’ve got two ways to get around them. Number one is they can make it so they can declare bankruptcy, but I don’t think they’re gonna allow us to do that. Number two, they can inflate the dollar to the point to where $200,000 is equal to $20,000.

If this happens, it raises all the boats in the water, and causes people of fixed mortgage to be able to pay their houses off early, and it’s win-win for the Democrats as well. ‘Cause people who have these mortgages will be able to pay off their house, they’ll be Democratic voters, and people who have lost since they haven’t gotten into the market in time will be Democratic voters ’cause they’re looking for a handout.

So I don’t know what you think about that, but that’s my take on the student loan thing.

RUSH: Well, I need you to back up, ’cause you were going somewhere I wasn’t aware you were going, so I think I lost a little track.

CALLER: That’s okay.

RUSH: You think what the Regime will do is inflate the currency such that a $200,000 student loan could be paid off for 20 grand?

CALLER: Yeah. That’s exactly what I think.

RUSH: But now, wait.

CALLER: That’s the reason why they’re having quantitative easing. That’s why the market is rising to the point where no one can explain it. This is where they’re gonna have everyone’s boat float. They can’t raise wages because it would hurt the economy, so —

RUSH: Wait a minute. But hold it a second. Inflating the currency like that would not float anybody’s boat.

CALLER: It would float the people’s boats who have fixed mortgages, fixed-rate loans who have numbers that are fixed. It would help them in the short run, but it would hurt everyone in the long run, and they could turn around and blame it on whoever they wish.

RUSH: That kind of inflation would make… I think before he did that, Obama would just forgive them. You know, he runs the student loan program now.

CALLER: Oh, yeah. I know he runs the students loan program. I think that he may forgive them. But I think they’re looking at the bigger picture. They’re not just looking at just student loans. They’re looking at housing. They’re looking at other things. They’re looking at stagnation in the wages and how they’re gonna fix it, just like Jimmy Carter did in the 1980s. (sic) If you have huge amounts of inflation, your paycheck is bigger, so you think you’re earning more money, but in actuality your dollar is worth less, so in that way they can say, “You’re earning more money under us.”

RUSH: Oh, I see.

CALLER: They’re paying off their bills, essentially. It’s gonna stop.

RUSH: Well, I don’t mean to be throwing cold water on your idea, ’cause I understand exactly what you’re saying, especially when you relate it to Carter. The sad truth is that is happening now. There is massive inflation, particularly in the cost of living. It hasn’t reached wages, by the way. It’s the opposite way. But the cost of living continues to skyrocket. It’s currency manipulation, the ChiComs are complaining about this, but it’s a good theory.