Paying The Piper

Bernanke actually admitted that he was targeting stock prices in a Washington Post piece yesterday. Bernanke can print money but he cannot control where it ultimately ends up. A lot of it is ending up in commodities as commodity indexes are making fresh two year highs.

If stocks do indeed rise the benefit will only be felt by a small segment of the population and all we are doing is borrowing gains from the future. The rise in commodity prices will be felt by everyone. Inflating asset prices has led to disaster after disaster. I don't expect a different outcome this time around. The only question is the timing.

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