We must reevaluate Bernanke´s supposed knowledge about the power of monetary policy. A reread of his (infamous) “A case of self-induced paralysis” on Japanese MP shows he´s almost exclusively concerned with deflation. “Deflation. Making sure “it” doesn´t happen here” in 2002 just after becoming Fed governor is another pointer to his “deflation phobia”. And he was once again very clear about that today in his Cleveland Fed Forum speech:
“If inflation falls too low or inflation expectations fall too low, that would be something we have to respond to because we do not want deflation”.
But that “phobia” should make him have a strong preference for some inflation. But no, he´s “capped” that at 2% tops! And that´s clearly not what the markets want. Just look at the stock market’s reaction to the fall in long term inflation expectations. Man, it´s ALREADY too low!
And the “outside stooge”, Hoenig, made his last speech before retiring this Saturday “shooting from the hip”:
“When you encourage consumption by inhibiting your interest rates from rising to their equilibrium level, you will in fact buy problems, and we have, in fact, bought problems”.
Yes, he must be from Pluto!
“Whoa! Pluto’s dead,” said astronomer Mike Brown, of the California Institute of Technology in Pasadena, as he watched a Webcast of the vote. “There are finally, officially, eight planets in the solar system.”
In a move that’s already generating controversy and will force textbooks to be rewritten, Pluto will now be dubbed a dwarf planet.
But it’s no longer part of an exclusive club, since there are more than 40 of these dwarfs, including the large asteroid Ceres and 2003 UB313, nicknamed Xena—a distant object slightly larger than Pluto discovered by Brown last year.
“We know of 44” dwarf planets so far, Brown said. “We will find hundreds. It’s a very huge category.”
I just hope that the number of “dwarf Stooges” stop coming over to “inhabit” the FOMC! Unfortunately, they’re “multiplying. This year there are already three!