I'm sure RW will have a full blow by blow of Bernanke's remarks at EPJ Central. Time limits my own analysis today, but I just wanted to share this gem, as Gentle Ben reveals a new "tool" that may soon be added to his bloated belt:
"A rather different type of policy option, which has been proposed by a number of economists, would have the Committee increase its medium-term inflation goals above levels consistent with price stability. I see no support for this option on the FOMC [EB: but, just wait a few months until unemployment is back above 10%]. Conceivably, such a step might make sense in a situation in which a prolonged period of deflation had greatly weakened the confidence of the public in the ability of the central bank to achieve price stability, so that drastic measures were required to shift expectations. Also, in such a situation, higher inflation for a time, by compensating for the prior period of deflation, could help return the price level to what was expected by people who signed long-term contracts, such as debt contracts, before the deflation began."
Got that? Deflation demands compensation because contracts were signed with the presupposition that the Fed was hell-bent on inflation. Maybe the SCOTUS could discover a constitutional "right" to inflation. That's really how these f*!kers think. And, by "people" do you mean your crony elite bankster friends, who thrive, and indeed depend on, the persistent inflation subsidy? Or, the poor widow who won't get to pay back her mortgage with worthless dollars? Just who is the signer of the most long term debt contracts? Oh, right. These guys.
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