Wednesday, March 2, 2011

Anyone But China

The fervently flung accusation
That commodities' rampant inflation
Is the fault of Bernank's
May be gentler on Yanks
Than a less US-based explanation.    

Federal Reserve Chairman Ben S. Bernanke appeared before a Senate committee yesterday, once again facing questions on the Fed's role in rising prices for food and fuel.  Since these commodities comprise a global market in which prices are set by international supply and demand, one may wonder whether the blame directed at quantitative easing willfully ignores the  the "£800 million panda in the room."  Most knowledgeable observers agree that Chinese demand is a more important driver of commodity prices than US money supply.

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