Wednesday, February 9, 2011

Is Bernanke a leader?

Here is the text of an e-mail I sent to those Republican shills at CNBC:

What Bernanke is trying to do is to break the currency pegs that the mercantilists around the world have used to keep their products artificially low. We were snookered by these policies for many years. It kept inflation low and we kept interest rates low and we went deep into debt to buy their stuff. Now Bernanke is trying to reverse this trend. They, the Asians in particular, are at risk of inflation if they keep their currencies pegged to the USD as Bernank takes the Dollar down. We need to move jobs back to this country. The devaluation of the dollar will make wages in this country cheaper. The devaluation of the USD will also take away some of the profit margin for those that import. I think this is where all the Republican angst comes from. Their financial supporters don't like the prospect of this new business paradigm. "Hire workers here? We can't do that!".
Bernanke is a leader. It has been so long since we've seen a leader that we don't recognize it, and feel compelled to attack him.
The US is in deep trouble, and it has everything to do with our balance of payments deficit. Importing inflation is the way to reverse that.

Couple Bernanke's policys with the prospect of RELATIVELY cheap energy, and we could import a lot of inflation without a big probem for years. These shale plays in Canada, N. Dak, and NY could be a boon. And as foreign enonomies slow down to avoid overheating, they will use less energy....

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