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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (25264)	12/7/2009 6:41:57 AM
From: Real Man	2 Recommendations Read Replies (2) \| Respond to of 71456

From recent Fleck. Rather shocking. articles.moneycentral.msn.com 'Bernanke at his word' So read the headline of a recent article by Jim Grant, in which he reprised a speech that Ben Bernanke gave in Japan on May 31, 2003, as a Federal Reserve governor, three years before becoming Fed chairman. (You can find the article here; subscription required.) The topic that day: deflation. Posing his own question and answer, Grant writes: "And what was deflation? Falling prices, pure and simple. Bernanke did not bother to distinguish between prices that fall on account of a banking or credit crisis vs. those that fall on account of advances in productive technology or improvements in economic organization. It was all the same to him -- and all bad." The word "deflation" brings fear to the hearts of Fed heads and many other people, whereas I'd be willing to bet that virtually all consumers worldwide would be happy to see the price of most everything fall (though, of course, people are always upset when their assets fall). In any case, "deflation" has been tortured to the point that it's the evil that must be prevented at all costs. As Grant notes, the speech Bernanke gave on that particular day in Tokyo was more radical than his musings had been in the U.S., at that time or since. In Grant's words: "It isn't enough, after prices have begun to fall, to stop the decline, the chairman said. Rather, a central bank should push prices up to where they would have been if they had never weakened in the first place." Reread that. It is rather shocking.