Inflation Concerns
I keep hearing reports of Bernanke’s inflation concerns intensifying, or something similar to that. It’s like a child who breaks his mother’s lamp, and then out of guilt, tells her that there may be something wrong with the lamp.
The Federal Reserve has added billions of dollars to the economy to bailout banks and artificially lower interest rates. That IS inflation! When you inflate a balloon, you do so by putting more air into it. The economy is inflated by putting more money into it. The rise in prices that we are beginning to experience, is simply the logical result of inflation. As the abundance of something increases, its value decreases. The decreased value of the dollar, in turn, causes producers to require more money for the same products and services.
He has a very good reason to be concerned about inflation. That’s exactly what he has been doing!