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May 27, 2011 / 74

A Vocabulary Lesson for the FED

Hello? Hello, Mr Bernanke? Are you there? Well… probably not – given the lack of competent activity at the FED these days, you’ve been AWOL for some time. But just in case someone is out there listening – or reading, I thought a little vocabulary lesson would be in order. You know – to help you maybe figure out what’s going on and why you appear to be so incompetent.

SO – the word of the day is STAGFLATION. Stagflation is when you have HIGH unemployment, HIGH inflation, and a STAGNANT economy. (See “Paul Volcker” and “Monetarism.”) That’s what we are currently experiencing in the USA.

You may not realize it though because of your tendency to try to make yourself and the FED look good. This tendency causes you to fudge the numbers – ie you LIE about unemployment numbers, you LIE about real inflation, and you LIE about a recovery that doesn’t exist except in your dreams.Your lies may fool the fat cats on Wall Street – but we Little People” don’t read about such things – we LIVE them so we’re harder to fool.

Coffee companies raise the price of a pound of coffee 20% or more, and you say 2% inflation… and we call BULLSHIT on you. Frozen burritos have gone up over 20% in the last year. “Fun size” candy bars have gone up between 20% and 30% in the last year. In 2009, average gasoline prices were around $1.80 a gallon. A couple of weeks ago, average national gas prices were $3.97, an increase of $2.17, a 120% increase.

2% inflation, Mr Bernanke? Let’s introduce you to another new vocabulary word – “HYPER-INFLATION”. That’s generally when inflation rises above 19 or 20% – like now.

And you try to maintain the fiction that “energy and food don’t count” because they are “volatile”. Yeah… volatile is a good description of the effects of hyper-inflation, and you seem to think that we believe your bullshit numbers?

The solution for stagflation is to raise interest rates – a LOT. Like Mr. Volcker did. We all remember Mr. Volcker, but without looking it up, I can’t remember who was in charge of the FED before him…

But you don’t want to increase interest rates because you fear you’ll kill the “recovery.” Mr B? Got a flash for you. NBER notwithstanding, THERE IS NO RECOVERY to kill! DO YOUR JOB, BERNANKE!!!

And I think it’s time you took your Keynesian Econ books and donated them to the fiction section of your local library – perhaps the fantasy or horror sections?


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