Here is another unpublished letter to the editor, this time to The New York Times, in response to a small bit of their roundtable op-ed “Questions for the Big Bankers.” Some fine folks there, including Simon Johnson, Bethany MacLean (who wrote Enron: The Smartest Guys in the Room), and Liaquat Ahmed (who wrote The Lords of Finance, about the gold standard and the Great Depression), which made it all the more incredible to me that the piece opened with this astonishingly dumb question by James Grant:
Bankers are dealers in money. The Federal Reserve is a creator of money — since the crisis began in August 2007, it has conjured up $1.1 trillion. Given the ease with which these dollars are materialized on a computer screen, how can they be worth anything?
So here was my reply:
James Grant says the Federal Reserve has created $1.1 trillion in new money since 2007 and asks how it can possibly be worth anything. If Mr. Grant thinks that dollars have become worthless, then, considering that money is fungible, I want him to know that I would be happy to take the worthless dollars in his bank account off his hands.
Ranjit S. Dighe