Bernanke's Private Life and Article on Nickels and Pennies

From LvMIC:

From the Wall Street Journal:

Ben Bernanke lives in a three-bedroom, 2,100-square-foot, attached town house near the Capitol. It has an appraised value of roughly $850,000, not far from the $839,000 he paid for it in 2004. A public record search shows he owes $672,000 on the home, after refinancing his mortgage twice.

One refinancing was in late 2009. The other was in late September, shortly after the Fed announced a new program, known as “Operation Twist,” which aimed to drive down long-term interest rates.

Mr. Bernanke holds a 30-year mortgage. He was required to send proof of employment, including pay stubs, before the bank approved the loan, according to a person familiar with the matter.

After a decade in Washington, Mr. Bernanke doesn’t seem to have been swept up by the nation’s capital.

He occasionally shoots baskets in the Fed’s dreary, underground gym. The closest he came to showing a wild side was when he was a professor at Princeton: He bought a Chrysler Sebring convertible, according to someone who knows him.

On most nights he’s home with his wife, Anna, reading on his Kindle after dinner, say people who know him. In the past 18 months, he has told others, he has read 200 books on the Kindle.
Lately he’s read about pre-World War II Germany, “In the Garden of the Beast,” and a room-by-room guide to a 19th-century British home, Bill Bryson’s “At Home.”

He doesn’t read books about the financial crisis. When asked in September if he had seen a recent HBO movie about it, he said he hadn’t: “I saw the original.”

And here I thought Bernanke spent his nights insulating his nearly $1 million home with stacks upon stacks of paper dollars.  Never mind, Keynes would most definitely disapprove as such “hoarding” would mean less spending in the economy.

In all seriousness, you have to marvel at the irony of Mr. “I missed the housing bubble” reading a guide book on the framework of 19th century housing.  Perhaps he should do some research on 19th century banking in the U.S. instead via the great Thomas J. DiLorenzo.  It also looks like the "Person of the Year" is brushing up on his German history prior to WWII.  One wonders if he will pay close attention to that bout of hyperinflation that paved the way for Nazism.

Out of the 200 books Bernanke claims to have read, you can bet Human Action or Man, Economy, and State aren’t on the list.

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Also see my piece at the LvMI today entitled "Will Nickels and Pennies Soon Disappear?"  Here is an excerpt:

So what does all this mean for nickels and pennies minted prior to 1983?

Gresham's law, named after Sir Thomas Gresham, who was a financial agent of the English Crown in the 16th century, states that overvalued money drives undervalued money out of circulation: "bad money drives out good" for short. More accurately, the law should state something along the lines of "government-enforced parities that alter the market value of money have the effect that overvalued money drives out undervalued money." Because in a free market those products and goods that are of higher value stick around longer than low-quality products, Gresham's law only applies when government monetary intervention is present.
To help understand the effect of Gresham's law, Jörg Guido Hülsmann provides a simple thought construct in The Ethics of Money Production:

Suppose for example that both gold and silver are legal tender in Prussia, at a fiat exchange rate of 1/20. Suppose further that the market rate is 1/15. This means that people who owe 20 ounces of silver may discharge their obligation by paying only 1 ounce of gold, even though they thereby pay 33 percent less than they would have had to pay on the free market. Prussians will therefore stop making any further contracts that stipulate silver payments to protect themselves from the possibility of being paid in gold; rather they will begin to stipulate gold payments right away in all further contracts. And another mechanism operates to the same effect. People will sell their silver to the residents of other countries, say England, where the Prussian fiat exchange rate is not enforced and where they can therefore get more gold for their silver. The bottom-line is that silver vanishes from circulation in Prussia; and only gold continues to be used in domestic payments. The overvalued money (here: gold) drives the undervalued money (here: silver) out of the market.

So with nickels worth slightly more than 5¢ and pennies minted before 1982 worth almost 3¢ due to their copper content, it isn't hard to imagine that they will someday disappear from circulation as the Fed continues to expand its monetary base.