If Bernanke fails to win confirmation for a second term it would probably signal the end of the policy of Quantitative Easing, which Bernanke has championed. Mny lawmakers feel he has contributed to the "debasement" of the currency and is sowing the seeds for future hyperinflation. (All nonsense, but they see it through the prism of their beliefs.) Hence, Bernake's departure would almost certainly be very bullish for the dollar.
What does cause hyperinflation?
ReplyDeleteThe lack of resources and capital to produce what is being demanded. That's what causes true scarcity and soaring prices. If anything, we have a surplus of resources and capital (including human capital) to produce everything we need and more, the problem is we are not using it. That's why our economy is shrinking and we are getting poorer. Deflation.
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