Originally Posted by lasbar
He is talking about QE ..Quantitative easing..
Do you understand what QE is? It means Bernake supports bond prices (maintains low interest rates) by creating artificial demand for bonds. He does this by paying with money that is not in circulation. Therefore, he is increasing the supply of $20 bills. When supply increases and demand stays the same, each bill is worth less than its original value. The graphic is backwards.
A better graphic would have been to show a restaurant bill for $40 and then have a $20 bill cut in half so it turns into two $20 bills.