Reply #2: Today's Market WrapUp

[ozymandius]

Bernanke Babble Analysis
BY ROB KIRBY

Last week, the esteemed chairman of the Federal Reserve – Mr. Benjamin Bernanke - dropped by the Monetary Economics Workshop of the National Bureau of Economics Research and imparted some of his wisdom upon the masses in a speech titled, Inflation Expectations and Inflation Forecasting.

A ‘ripping critique’ of Mr. Bernanke’s speech was penned this past weekend by The Prudent Bear’s, Doug Noland.

In his speech, his authoritativeness (Bernanke) offered this quip – or nugget if you will - on the effect of rising oil prices on inflation,

“A one-off change in energy prices can translate into persistent inflation only if it leads to higher expected inflation and a consequent ‘wage-price spiral.’ With inflation expectations well anchored, a one-time increase in energy prices should not lead to a permanent increase in inflation but only to a change in relative prices.”

The Fed Chairman – the man doing ALL the money printing – he’s o.k. with the inevitable push this creates on asset prices but he’s simultaneously confessing his CONCERN about this metastasizing into higher wage demands? It’s like folks disadvantaged by HIS monetary debasement and subsequently trying to “keep up” through higher wages are as unwelcome as a hurricane in the Gulf.

!!:grr:

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