Skip O'Neill – Liberty for All

Ron Paul for A New Direction

Politics of Inflation

with one comment

In arguing food inflation is not the Fed’s fault, Chairman Bernanke points the finger at everyone but him.     Just as with a lot of Bernanke’s policies, his argument may hold in an academic setting, but the real world is a bit more complicated.

Summarizing the greatest money printing experiment in monetary history, Bernanke proudly stipulates that the program has been “effective”, because:

  • “equity prices have risen significantly”; and
  • “inflation compensation as measured in the market for inflation-indexed securities has risen”

Yet, when quizzed about whether his policies contribute to commodity and food inflation, Bernanke argues that the Fed’s policies have only influenced equity prices to the upside, not commodity prices. While that logic is unlikely to convince a preschooler, the Fed chief goes on the defensive to defuse the argument that his policies may actually be destabilizing the Middle East and Asia, where a high portion of disposable income is spent on food. With regimes toppling left and right, Bernanke must feel he is carrying the weight of the world on his shoulders.

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One Response

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  1. Inflation is a hidden tax and with Obama allowing our currency to devalue, he is taxing all Americans. He is lying to the public.

    Christine Willis

    February 16, 2011 at 10:11 pm


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