"Bernanke: Fed is intent on preventing 'stagflation'" by Robert Gavin, Globe Staff | June 5, 2008
CAMBRIDGE - Federal Reserve chairman Ben S. Bernanke signaled yesterday that the central bank is turning its attention to fighting inflation after several months of cutting interest rates to bolster a weakened economy and struggling financial system.
Speaking to graduating seniors at Harvard College's Class Day, Bernanke focused on the impact of soaring energy, agricultural, and commodity prices, comparing today's situation to that of the 1970s, when runaway inflation and stagnant economic growth gave rise to the term "stagflation."
.... Bernanke said the Fed is worried about the dollar, which has declined in value, compared to other currencies, and is contributing to inflation. A weaker dollar means imported goods - including oil - cost more in the United States.
Where ya' been, Ben?
This kind of wage-price spiral fueled inflation in the 1970s, but Bernanke said there's little evidence such a spiral is underway now. Bernanke conceded today's conditions, particularly soaring energy prices, seem similar to those in the 1970s, but said the economy has changed significantly.
Not only that. If you read the blogs, it is more akin to 1929.
Of course, the lying, agenda-pushing MSM would never tell you that.
It is more open, flexible, and energy-efficient, Bernanke said, and workers are significantly more productive than their counterparts in the '70s, due largely to technology. Workers who are more productive enable employers to produce more goods and services without increasing overall labor costs, meaning lower prices.
And PROFITS fit in where, corporate media?
Very deft technique, huh?
If WAGES GO UP, PRICES GO UP!
Translation: Can't give you a raise, worker, even as we pull down profits!!!!
But when, say, OIL comes down, prices GO UP!
How that screwing feel, Americans?
The inflation rate has run about 3.5 percent over the past year, compared to 10 percent in 1975, when Bernanke graduated from Harvard, the Fed chairman noted.
"I see the differences between the economy of 1975 and the economy of 2008 as more telling than the similarities," Bernanke said. "Today's situation differs from that of 33 years ago in large part because our economy and society have become much more flexible and able to adapt to difficult situations and new challenges."
That is so BUSH-like!!!!!!
