Hey did anyone manage to see Ben Bernanke’s first ever press conference the other day? Want to know what I think? Either Bernanke doesn’t understand or doesn’t care that inflation sensitive market/price indicators like:
– The falling dollar
– Oil Prices (oil is traded in dollars)
– Rising Gold prices
– The fairly recent commodity index movements.
ONLY mean one thing…additional big inflation ugliness is heading our way! When the markets talk with a consistent unified voice; Helicopter Ben needs to stop resisting them and listen.
He did manage to answer a few of the more pressing questions, but on others… he didn’t seem to have any answers at all. He made it clear that there would be no QE3 as so many of us feared. With 600 billion QE2; still buying all of our debt for the last 6 months scheduled to end by July 1st it’s good to know that the they would soon be stopping the presses. He also hinted that the current 0% federal funds rate days were almost over…both of which would tend to indicate that the “easy” monetary policies of the last 3 years were over as well. On the topic of the plummeting dollar and all of it’s destructive effects on the middle class and the poor…he had nothing to offer, causing both Gold and Silver to close up sharply.
Let’s face facts shall we; the 2008 economic emergency used to rationalize the feds stepped up involvement into the economy has been over now for 2 ½ years. The deflation threat they had us all running from is as statistically and theoretically unlikely to occur as sending a man to mars, in fact, no one has even mentioned it in a very long time. With none of those risks currently present, it’s way past the time for the fed to step back … let rates rise, and stop printing money…something they should have done prior to QE2! There is no justifiable argument for them to do anything else!
The model for economic growth reads like this: Limited spending, flat tax rates, minimal regulation, and stable money. We are still waiting for someone to step up and restore Reagan’s pro growth model before things get worse.