Economics Update

It appears that Ben Bernanke has a mentioned a secret plan to win the war in Vietnam protect the US dollar from inflation,^* which will prevent inflation when the economy recovers, and this has driven Treasuries higher, and their yields lower:

Fed officials said in a report submitted as part of Bernanke’s testimony that policy will be “tightened” when the labor market improves, an economic recovery takes hold and pressures holding down inflation “diminish.” The comments follow a rally in stocks and a rebound in corporate earnings that have stoked speculation the worst recession in half a century is ending.

I'm not an economist, but I still think that one way to get out of this mess is to inflate our way out of this, which will have the effect of devaluing the debt which is holding back our economy.

I understand that it can (*cough* Zimbabwe *cough*) get out of hand, but it seems to me that too many people are under water for any recovery now.

Considering the fact that Americans are paying down their debt at the fastest rate since 1952, I do not see an alternative.

IMHO, We are in a deflationary trap, and creating inflation is the way out of it.

In any case, Bernanke's statements about inflation boosted the US dollar, and his statements about recovery boosted crude oil prices.

^*It's a "Tricky Dick" Nixon reference, OK?