Bernanke's Fairy Tales
Written By: Michael Pento | Posted: Wednesday, September 14th, 2011
Three things that Ben Bernanke doesn't believe exist are Leprechauns, the Tooth Fairy and Stagflation. He has totally relied on specious theories like output gaps and a very high unemployment rate to keep inflation in check. What he fails to realize is that an increase in the money supply doesn't always engender job growth or put fallow resources back into production. However, what it does always achieve is to increase the aggregate level of prices in our economy.
More evidence of our battle with stagflation was found in today's economic data. Jobless claims for the week ending August 13th rose by 9k to 408k. Existing Home sales fell 3.5% in the month of July, while the median price decreased to $174,000 from $182,100. And the Federal Reserve Bank of Philadelphia's general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July.
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