But, think of it from our perspective.
Her appointment guarantees more inflation, and more profits for traders like us.
I'm sorry for the economy, and for all the victims of inflation, but there's nothing we can do.
* * * * * J B K * * * * *
San Francisco
The new Obama Fed is going to be very dovish when it comes to fighting future inflation and defending the value of the dollar.
The president has nominated Janet Yellen to be vice chair of the Federal Reserve. Ms. Yellen is a distinguished economist who unfortunately subscribes to the Phillips-curve model that trades off unemployment and inflation. In other words, rather than excess money creation as the cause of rising prices, she focuses on the unemployment rate, the volume of new jobs being created, and the growth of the overall economy. For Ms. Yellen, inflation is caused by too many people working and too much economic prosperity.
And since we have the opposite problem today -- high unemployment and too few people working -- she will be the last Fed governor to turn out the lights on the central bank's zero interest rate.
Sean Hannity FREE
There is no evidence in Ms. Yellen's public opinions or speeches that she might use a market-price rule -- targeting commodities, gold, bond rates, or the dollar -- as a forward-looking inflation (or deflation) signal. So the absence of a commodity- or dollar-price rule will continue at the Fed. Ben Bernanke doesn't use a market-price rule, and Obama's additional Fed appointees -- whoever they are -- will undoubtedly come from the same Phillips-curve camp.
