You decide if Jim Rogers is right:
"All [Ben Bernanke] understands is printing money....His whole intellectual career has been based on the study of printing money. Give the guy a printing press, he's going to run it as fast as he can."
How did it come to this? How could it be possible for someone steeped in the history of finance and economics to simply repeat mistakes having clear historical precedent...?
Nations have come and gone, but currency depreciation to fool the masses have been used since Nero's debasing of the denarius to feed the imperial Roman army, the German Weimar Republic's attempt to print its way out of debt to stave off communism, and of course more recently and less discussed, the Latin American inflations of the 1980s.
Since moving off the gold standard in 1971, the U.S. dollar has lost over 80% of its purchasing power. (The BLS has an interesting calculator for this here BLS Inflation Calculator). The U.S. dollar is about to lose quite a lot more purchasing power...
The Bottom Line: The Chairman is now, in part, targeting the stock price movements when making its decision of when and how much debt to monetize (ie, money to print) because he is the leader of the only Federal goverment agency supposidly able to act (see the surprising op-ed below)...
Invest - or - more accurately, protect whatever monetary assets you may have, accordingly.....
I disagree with the premise of much of what is written in the Chairman's op-ed so I will only highlight the new stock price targeting implied here...
From the Washington Post, by Ben Bernanke
"What the Fed did and why: supporting the recovery and sustaining price stability" exerpts below...
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
The Federal Reserve cannot solve all the economy's problems on its own. That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators and the private sector. But the Federal Reserve has a particular obligation to help promote increased employment and sustain price stability. Steps taken this week should help us fulfill that obligation.
Text of Chairman Bernanke's Op-Ed
