More Bernanke On Inflation
Bernanke gave a speech yesterday and he blamed current inflation on rising commodity prices globally. He didn’t of course address why commodity prices are rising globally. The reason is that we export inflation by exporting weaker and weaker dollars. Dollars are weaker because of Bernanke’s policies. Look, you need to view Bernanke as more of a PR spokesmen who is trying to maintain confidence in the economy and the markets. He’s more of a politician than you think. Therefore, you need to put his comments in that context.
Moreover, do you see his tone shifting? A few months ago, he refused to acknowledge that inflation even existed. He knows he can’t do that anymore, so he acknowledges it, but at the same time trivializes it by calling it temporary and transitory – and while blaming it on anything but the Fed.
Where will his tone shift to next? Keep watching.