Nero fiddled, Rome burned, but the empire did not collapse. That's the scenario that Bernanke is trying to push. I think that he should do a reality check and try to tell this to the average person on the street. The economy is in flux. Investors are getting cautious and Wall street is back to treading water, except for areas that usually remain stable. Odd situation for the beginning of summer. This is usually a ho-hum time of year, but this one is likely to be different. The fuel market took a small drop, much to everyone's relief, but the flip side is that June 1st marks the beginning of hurricane season. It also would have to drop much further before any significant impact would be achieved. Bright spots are hard to find. Crop planting in the main grain areas have been delayed due to weather. The UN summit on world food supply that is meeting this week sees trouble ahead. Price and supply are the main culprits. The U.S. consumer is being battered by the overall onslaught of price increase, from the pump to the grocery store and there is more to come. The banking system, credit debt, write downs, defaults and a general air of suspicion and frustration avails upon the money lenders and the consumer alike. For Ben to say that stagflation will not become an issue is avoiding a truth. The auto industry, construction and everything related to these areas will be laying off. The bankers and the airlines were first in line. Today's service sector report is perceived as good? Employment down while inventories and price are on the rise? The only real plus was exports. How long does anyone expect that factor to last? The rest of this world is starting to be affected by inflation which means that their central banks will not be cutting rates anytime soon. If their costs rise, so does the export price - and we are their market. Good luck Ben - go b.s. someone else. Tell me all about it next year - when all the costs finally filter through.
Anyone remember the Carter years?