Look at this exchange with Bernanke at the National Press Club (in a journalist's summary):
Question: Will there be a Q3?
Bernanke: In the end, we'll just ask the same questions. Where's the economy going, and what do various inflation indicators look like? We'll ask those questions. If unemployment is still too high, then we may continue. If we're moving towards full employment, then we won't need to stimulate more.
And what is full employment? The Fed's statisticians believe that full employment is an unemployment rate of 6 percent or so, and we are nowhere near headed that way.
Plus, Bernanke is wholly wrong to believe that somehow employment can be used as a measure of economic health. For many decades, socialist economies bragged about zero unemployment, but the economies regressed year after year. Even in mixed economies like ours, high employment is most often an effect of prosperity and never a cause.
Plus, we can't believe Bernanke that employment data alone will drive the decision. He is an errand boy for the big banks and Wall Street. That will drive his decisions, along with politics. And we can be all but certain that there will be plenty of bad news around by the summer, which will provide enough cover for another round of stimulus.
Meanwhile, what's anyone going to do about the problem of much higher prices, which is the ghastly beast waiting around the corner? The truth is that that the Fed pretends as if it has nothing to do with this. Bernanke routinely says that prices are formed by supply and demand — which is true enough in a free market, but money creation complicates the picture.
Another truth is that the Fed doesn't really care about inflation as much as it cares about the solvency of the banking and financial systems. Bernanke would drive us right into hyperinflation to save his industries. Savers living on pensions just don't have the political clout to stop the money machine.
