hipmatt – Macroeconomics is messy due to large number of variables. Actually, Bernanke is being correct on his statements.
1. Inflation is moderating – The fact that house prices are falling at the rate of at least 10% per year nationally and even upto 50% in some isolated markets means overall inflation has to come down. If a person spends, say 30% of income on housing, and house prices fall 10% per year, that alone contributes 3% per year of annual deflation.
2. Weak $ is a plus in some respects – it reduces trade deficits, increases exports, that in turn causes rise in employment etc., Weak $ only hurts importers and people with large accounts of cash (or cash equivalents). Since most Americans have net negative cash (or cash equivalent) – being in net debt generally, inflation is actually not bad for them.
Rest of the statements, I won’t attempt to side with BB since I don’t agree with him. But surely that man is not an idiot. He is just interpreting the data differently.
