The US is facing the most challenging economic environment in decades, if not generations.
Inflation is spirally out of control, a housing crisis and a looming broader credit crisis are undermining the fabric of our banking system, and consumer confidence is moving lower. The dollar has moved to all time lows while commodities soar.
Against this backdrop, the Fed has become a tool of the Wall Street. Bernanke has lowered rates dramatically to try to make money free again, which is exactly how the credit crisis started in the first place. Now, with inflation becoming a significant drag, Bernanke should be raising rates quickly and decisively. Instead he chooses to put his head in the sand.
Where he could have committed to a timetable, like Jean-Claude Trichet, and said inflation is a real risk, it is global and we will stamp it out, Bernanke came out with more weak and indecisive language:
“Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased.”
The dollar will get stronger, housing will stabilize and the US economy will grow eventually. One day everything will be fine. You don't need a degree from Harvard to know that. You also don't need a degree from Harvard to know that that day is only coming when Bernanke is no longer chairman of the Federal Reserve.
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