Early last year Glenn Beck stated that people do not realize “how much money we’re printing at the Federal Reserve.” Huh? Ignoring the fact that the United States Dept. of the Treasury, not the Federal Reserve, prints money — both  government bodies are independent of each other — the point Beck was driving at is absurd. Beck, for some time now, has been pushing the idea that the U.S. dollar is headed for a downward spiral driven by hyperinflation and devaluation. Unfortunately, many people have bought into this notion, as evidenced by the endless Buy Gold commercials on TV. Fears that the American dollar is headed for disaster are hyped and have little basis in reality.

One of Beck’s central claims is that America is printing money so fast that it’s headed for Weimar Republic-like hyperinflation. Such claims have been invigorated after Federal Reserve Chair Ben Bernanke’s announcement that the Federal Reserve is considering quantitative easing to boost the economy. The Federal Reserve intends to buy $600 billion in treasury bonds to create controlled inflation. The goal of this, according to The Economist, is to make money more accessible for borrowing and investing, as well as to boost American exports. A lower-valued dollar makes American goods cheaper for foreign consumers, encouraging them to buy more. This increased demand for American manufactures and exporters should boost the revenue of domestic firms and encourage them to hire more people. For a country in a recession with a large trade deficit, limited inflation could be very beneficial.

Ignoring this possible benefit, Beck labels the slight devaluation of the dollar as the beginning of the end. Beck fails to realize that while some devaluation of the dollar is the result of government actions, a lot of it has to do with global markets. The most potent global development is the rise of the euro. The expansion of the euro across the enlarging European Union has reduced the world’s dependence on the dollar as the world’s reserve currency. The dollar remains dominant, particularly in light of the sovereign debt crisis in Europe, but the new competition has reduced the dollar’s relative value.

Beck still fails to reasonably identify why the government would purposely destroy the value of the dollar and put the United States on the road to hyperinflation. I doubt Bernanke, who has dedicated years of his life to economic history and understanding how capitalism works, has a Marxist, socialist, communist or even, as Beck often throws into the mix, a fascist ideological desire to see the capitalist system collapse. The Financial Times also pegged Bernanke a moderate Republican,, which one would think would decrease Beck’s fears. Some more reasonable people might prescribe to the idea that the Federal Reserve is attempting to monetize, or inflate away, America’s debt. This too is not realistic. America cannot inflate away its debt. The majority of America’s debt and entitlement programs — such as Social Security, Medicare and Medicaid — are indexed, which means they are set in real terms and are unaffected by increases in inflation. Aside from that, U.S. projects are funded by the debt that countries or individuals buy, and if the government started inflating away its debt, people would stop buying it. This would greatly cut into the government’s ability to spend, and as I am sure Beck would agree, this is something the government loves to do.

Unfortunately, people are still buying into this fear. Beck’s rants, in combination with an endless stream of commercials selling gold, have successfully frightened a great deal of his audience. They are now wasting their money buying gold. Right now gold is a horrible investment. After long hours listening to Beck’s rant about his apocalypse fetish, combined with the announcement of quantitative easing and endless commercials promoting the benefits of buying gold, gold prices have soared — artificially. According to economic writer Megan McArdle, gold is looking “bubblicious,” She suggests that the recent spikes in gold prices are evidence that the gold market is developing a bubble. The problem with bubbles is that they pop, and if the recession has taught the world anything, it is that bubbles — like the housing bubble — are not good investments.

Another argument made by proponents and sellers of gold is that it is excellent insurance against a devalued dollar on the verge of collapse. Even if the dollar did collapse, what good is gold going to do? If the dollar collapses, the world would not convert back to the 1700’s when gold was accepted tender to buy silk stockings and rum; the world would be in utter chaos. Food, electricity, heat and water would be more valuable in such a crisis  — not gold. Hopefully people will come to realize that Beck’s predictions are over the top and unfounded; otherwise people will continue to throw away their money believing that the Federal Reserve is endlessly printing money.