3 June 2008 - 18:04More commentary 6/3/08

It was good to see Bernake admitting the Fed is at least partly to blame for the fiasco that they also of course “solved” in his speech today. It was laughable when he mentioned that low cost imports helped make the Fed’s job of containing inflation easier. The plan to solve the problem they created includes additional regulation, additional money creation to bail out banks investment firms, interest rate cuts which cause inflation and last but not least “close attention to the foreign exchange markets” to ensure that our currency remains valuable enough to buy junk from the Chinese at low prices and thereby do the Fed’s job and keep inflation low. I really don’t think that any of these measures will solve the problem, since the problem is the Fed itself.  Well at least we know why the dollar went up today, the Fed said they would wave a magic wand and stabilize it.