[BlazingArizona]

Inflation is dangerous. We had wild inflation in housing. Now we have wild inflation in energy. And there seems to me to be under-the-radar inflation in food prices. Ron Paul is wrong on some big things, but I don’t think his warning about the inflation of the currency is one of them.

What Bernanke is worried about right now is the massive deflation in real estate that has taken place. The traditional remedy for deflation is to increase liquidity (increase the ratio of money to Stuff). In ordinary times this would mean inflation, but Bernanke is hoping that failing home prices, will produce a contraction of assets that precisely matches the inflation of all other assets, such as energy.

All he gold standard means is holding the money supply constant. Since the amount of Stuff, all the goods that US dollars trade for, increases at a modest rate each year, a gold standard would mean an excruciating depression. Would that be preferable to what we have now?

The most recent time of a strong dollar was 2002-2003. Gold was cheap, commodities were cheap and most of us in the tech fields saw our jobs float off to India. Is this the hard-currency nirvana we want to go back to?

[George W. Bush]

What Bernanke is worried about right now is the massive deflation in real estate that has taken place. The traditional remedy for deflation is to increase liquidity (increase the ratio of money to Stuff). In ordinary times this would mean inflation, but Bernanke is hoping that failing home prices, will produce a contraction of assets that precisely matches the inflation of all other assets, such as energy.

He's just bailing out the banks on their subprime crisis, the current replay of the S&L bailout of the late Eighties when another Bush was president. And he'll tank everything in sight to save those banks from their own drunken orgy of irresponsible lending.

He's even caused the Chinese, with their current holdings of $3.5 trillion in U.S. debt, to announce they will henceforth purchase other currencies. Why wouldn't they if all the debt they invested in was now only worth half of what it was supposed to be worth. They're commies but they're not that stupid.

After Bernanke saves the bankers' bacon and we're looking for lenders to continue our $1 trillion p/year borrowing on our $9 trillion debt, tell me who is going to be dumb enough to want to buy U.S. bonds? Not the Chinese. And, for damned sure, not those precious bankers the Fed just bailed out by debasing the currency and reaping a hidden tax on the entire economy but which hits hardest at those who live on fixed incomes and rely on savings that are suddenly worth a lot less.