If you were hoping pump prices would
soon slow their meteoric rise, you didn't
get any help from Ben Bernanke on 4/27.
The Federal Reserve Board Chairman
held a new conference to address future
monetary and fiscal policy.
While Bernenke did say the Fed would
soon end quantitative easing, he also
said there was no hurry to boost interest
rates to slow the collapse of the U.S. dollar.
Now, I just said a mouth full there, so,
let me explain.
QE has been the Fed's attempt to re-
liquidate the banking system which almost
collapsed a couple years ago because of
several bad "bets" like credit default swaps,
derivatives and other questionable investments.
To achieve this, the Fed has been asking
the U.S. Treasury to print $4 billion dollars
each day for the past several months.
Any time you boost the supply of something that
you end up de-valuing it. Such as the case
with U.S. dollar. Now, oil is bought in dollars
and when the value of the money you're using
to buy something goes down, the cost of that
something goes up.
That's why you've seen the price of a barrel
of oil and subsequently gas and diesel sky-rocket.
The answer is to raise interest rates which
would start to dry up some of the excess
money supply but Bernanke says there's
no immediate plan to do that. So, the dollar
will only get weaker and prices for oil and
everything else will continue to climb.
What was most alarming about Bernanke's
news conference was his total inability to
grasp the high cost of inflation on the
individual and the U.S. economy.
I understand what he's trying to do.
De-valuing the dollar makes U.S. made
products cheaper to the rest of the world.
That would boost U.S. production and
create jobs in this country.
But, at what cost! Purposely driving down
the dollar is not good policy and contrary
to the original mission of the Federal
Reserve Board to protect the dollar.
Bernanke's approach will lead to bigger job
losses than it will create and drive us right back
into recession if not a depression. He's
completely and totally detached from the
"real world" that most of us have to live
in nor does he seem to care one wit if the
American public is eventually driven to the
poor house by his policies.
soon slow their meteoric rise, you didn't
get any help from Ben Bernanke on 4/27.
The Federal Reserve Board Chairman
held a new conference to address future
monetary and fiscal policy.
While Bernenke did say the Fed would
soon end quantitative easing, he also
said there was no hurry to boost interest
rates to slow the collapse of the U.S. dollar.
Now, I just said a mouth full there, so,
let me explain.
QE has been the Fed's attempt to re-
liquidate the banking system which almost
collapsed a couple years ago because of
several bad "bets" like credit default swaps,
derivatives and other questionable investments.
To achieve this, the Fed has been asking
the U.S. Treasury to print $4 billion dollars
each day for the past several months.
Any time you boost the supply of something that
you end up de-valuing it. Such as the case
with U.S. dollar. Now, oil is bought in dollars
and when the value of the money you're using
to buy something goes down, the cost of that
something goes up.
That's why you've seen the price of a barrel
of oil and subsequently gas and diesel sky-rocket.
The answer is to raise interest rates which
would start to dry up some of the excess
money supply but Bernanke says there's
no immediate plan to do that. So, the dollar
will only get weaker and prices for oil and
everything else will continue to climb.
What was most alarming about Bernanke's
news conference was his total inability to
grasp the high cost of inflation on the
individual and the U.S. economy.
I understand what he's trying to do.
De-valuing the dollar makes U.S. made
products cheaper to the rest of the world.
That would boost U.S. production and
create jobs in this country.
But, at what cost! Purposely driving down
the dollar is not good policy and contrary
to the original mission of the Federal
Reserve Board to protect the dollar.
Bernanke's approach will lead to bigger job
losses than it will create and drive us right back
into recession if not a depression. He's
completely and totally detached from the
"real world" that most of us have to live
in nor does he seem to care one wit if the
American public is eventually driven to the
poor house by his policies.
