|First, a review.
Ben Bernanke has been emulating Atlas holding up the world on his shoulders. Thinking that printing money and flooding the system with it would have prevented the Great Depression, Bernanke has been doing exactly that. Critics decried the move, saying that all that fiat money would send the dollar plummeting into the depths, never to rise again. Yet, the dollar has not only held its value, it has risen against every major currency in the last five years. The doubters were either wrong or early.
Indeed, deflation has been Bernanke's saving grace. But, history tells us that the Fed's medicine eventually ends up hurting the patient. With so much free money, banks don't need to lend to make profits. Consumers can't, for the most part, take out loans at low rates—their credit card companies are usurious thieves, borrowing from the Fed at 0% interest rates and lending at exorbitant rates. Food and energy prices continue to rise, cutting into consumer budgets and dragging retail sales (ex-food and energy, of course) down.
What will it take to return the economy to “normal”—assuming such a thing is even possible? Well, as far as we can tell, inflation will signal a return to near-normal. And, we see inflation on the horizon, coming very soon to destroy Bernanke's dream of retiring a hero next year (he's announced he's getting out of government service).
Before he goes, though, he wants you to know that you should expect stock prices to go to the Moon (even if we are incapable of doing so like we did fifty years ago—fifty years of Fed mismanagement, of course). But, look out, folks, inflation is coming soon to a retail establishment near you.
Paul Craig Roberts explains that the recovery Bernanke has engineered has benefitted only the richest 7% of Americans in this post entitled Recovery for the 7 Percent:
Sunday, April 28, 2013
Pay No Attention To That Bernanke Behind The Curtain
Posted by Unknown at 18:37