With investors extremely worried about what they consider to be excessive money printing, today Michael Pento, of Pento Portfolio Strategies, writes for King World News to warn that the reckless policy of central planners will end in disaster. Pento had this to say about the situation: “Two lovers, of the notion that inflation can cure everything that ails an economy, recently squared off in a battle over who adores counterfeiting the most. Paul Krugman, who probably has a statue of Al Capone at his bedside, chided Ben Bernanke in a New York Times Magazine article for his unwillingness to raise the Fed’s inflation target in order to reduce the unemployment rate.”
“The recipient of the Nobel Prize in economics penned an article titled ‘Earth to Ben Bernanke’ on April 24th. In it he encouraged Bernanke to embrace the idea that more money printing can save the world by writing, ‘Higher expected inflation would aid an economy.’
Bernanke addressed Krugman’s comments at last week’s FOMC press conference. His dovish response directed towards Krugman’s commentary was, ‘The question is, does it make sense to actively seek a higher inflation rate in order to achieve a slightly faster reduction in the unemployment rate…the view of the committee is that would be very reckless.’
While it is commendable that Bernanke doesn’t publicly admit he wants to send inflation higher than it already is; the question remains as to why he believes that higher inflation can cause even the slightest reduction in unemployment…. Read more here..