As Fed Chairman will Bernanke be as much of an asset inflationist as Greenspan was?
Probably...Bernanke's obsession with "deflation" seems to gaurantee a loose monetary policy to keep "aggregate demand" high. Under Greenspan most of the "printing press" money ended up on Wall Street and in the Real Estate Bubble...even as wages fell due to the China Trade. So in that sense Bernanke is Greenspanian in his approach to monetary policy.
The problem is that Greenspan's hyper-liquidity experiment has been producing unfortunate results lately...namely near hyper-inflation in housing prices and in some commodities, especially oil and gas.
Remember inflation is always essentially a "monetary phenomenon;" and hyper-liquidity will find a way to express itself in the markets one way or another...
Worse yet the tax cuts for the rich and Wall Street interest simply add to aggregate demand and compliment the hyper-liquidity already in the system. Even while ballooning the deficits and putting pressure on the dollar.
Greenspan seems to have realized his mistakes...and has been slowing backing out of the byper-liquidity "bar room" lately...hopeing not the "spook the markets."
Now Wall Street expects to reverse all of that...and welcomes the start of the BERNANKE BUBBLE...
STILL, ONE HOPES THAT THE BANK OF CHINA WAS CONSULTED ON ALL OF THIS...BECAUSE THEY ARE THE ONES FINANCING THESE FED/WALLSTREET HI-JINKS IN THE END...
My hunch is that this "changing of the gaurd" at the Fed will not be welcome at foreign central banks especially if Bernanke fails to "raise rates by 25 BP" sometime in the near future... Because, that's like missing the "minimum payment" on your credit card to our many foreign money masters...!
BERNANKE SHOULD MAKE HIS FIRST OFFICAL ACT AS FED CHAIR A TRIP TO CHINA; SO HE CAN GET HIS "MARCHING ORDERS" FROM OUR NEW MONEY MASTERS IN THE ORIENT!
