Sunday, April 12, 2009

The Fed's Efforts to Push Global Inflation

Fed Chairman Bernanke's 60 Minutes appearance wasn't the end of the Fed's happy face PR push. Today, there's a puff piece in LaTi about Bernanke.

Fed polling must show a very negative view of the Fed, otherwise the private Bernanke would not be spending so much time with the media. The LaTi piece is mostly Fed propaganda, including how Bernanke is open to different ideas from Fed staff.

Bernanke may be a little more open in listening to staff, but Fed staff tell me that at meetings with senior Fed personnel when a vote is taken on a direction the Fed should take all hands go up in favor and no one ever objects to anything. Dissent at the Fed staff level doesn't happen.

The most interesting paragraph in the LaTi piece is the last one:

[Bernanke's] inclination to build consensus has extended internationally as well. In October he played a leading role in engineering a joint global interest rate cut with the European Central Bank and the central banks of Britain, Canada, Switzerland and Sweden. He is particularly close with Bank of England Gov. Mervyn King, who shares his academic background, and has quietly urged European Central Bank President Jean-Claude Trichet to move more aggressively to stimulate the economies of Europe.
This is further indication of the Fed's attempt to make inflation a global phenomena. England is clearly on board and Bernanke is still working the ECB. Bottom line, it is going to be tougher than ever to protect yourself against the coming inflation.

In the old days, you could find the currency of a country that was not inflating at the rate of the U.S. These days, Bernanke and the U.S. are trying to make it impossible to find any such strong currencies. Commodities will have to be the safe haven.

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