Ben Bernanke Passes the Buck
Bernanke: Don’t Blame Me for Higher Food Prices
By Sudeep Reddy
Supply and demand abroad for commodities, not U.S. monetary policy, are causing higher food and energy prices rattling much of the world, Federal Reserve Chairman Ben Bernanke said Thursday.
“The most important development globally is that the world is growing more quickly, particularly in emerging markets,” Bernanke said in response to a question after his speech at the National Press Club.
As economies in Asia grapple with high inflation, Bernanke said constraints on supply — such as bad weather — along with increased demand are to blame for pushing up prices for food commodities.
Strong growth in emerging economies is moving millions of people from poverty to the middle class, changing their eating habits — “more beef and less grains and so on,” Bernanke said.
The Fed’s policies are aimed at growing the domestic economy and “to address stability in the United States,” he said. For some foreign countries facing high inflation, “their policies have not been such to keep growth and capacity in balance,” he said.
“I think it’s entirely unfair to attribute excess demand in emerging markets to U.S. monetary policy,” Bernanke said. Those nations can use their own monetary policy and adjust exchange rates to deal with their inflation problems, he said. “It’s really up to emerging markets to find appropriate tools to balance their own growth.”
Still, higher oil prices in particular do present risks to the U.S. They act as a tax, eating up consumers’ incomes at a time when the Fed is “trying to get consumers more confident,” Bernanke said. While overall inflation in the U.S. “is quite low,” he said, higher commodity prices would become a problem if they feed into wages or broader goods and services.
editors note: Buck passing or passing the buck is the act of attributing another person or group with responsibility for one’s own actions. It is also used as a strategy in power politics when the actions of one country/nation are blamed on another, providing an opportunity for war.
yes, when you are in a no win situation it would be time to blame the game you are in. All this fed easing is based on low inflation, but as you pay more for food and gas in the U.S. you can kiss jobs goodbye, to countries that can raise rates.
Core inflation is a measure of inflation which excludes certain items that face volatile price movements, notably food and energy.
Bernanke does not care about your living standard…which is on the way down as the spiral continues. This would not have to happen, if the world exits the U.S. dollar as the reserve currency.
“Let them eat cake” is the traditional translation of the French phrase “Qu’ils mangent de la brioche“, supposedly spoken by “a great princess” upon learning that the peasants had no bread. As brioche is a luxury bread enriched with eggs and butter, it would reflect the princess’s obliviousness to the nature of a famine.
“Strong growth in emerging economies is moving millions of people from poverty to the middle class, changing their eating habits — “more beef and less grains and so on,” Bernanke said.”
so what about the rest of the starving masses, that are not yet having a big mac. They can’t afford a bowl of rice or a loaf of bread or a tank of gas. So when they save up a weeks wages to get a triple pounder with cheese, that will have to hold them for a week. yes Ben, eating habits have surely changed.