GENTLE ON BEN

The Chairman was very good today. The press was perfectly awful. I could have looked good in front of that room full of frauds. The questioning was about as difficult as that might come from MSNBC interviewing The Leader, who by the by, grabbed some national tv time this morning to announce that he had, in fact, been born...or some such thing. Anyway, back to Ben

Despite the absence of the press, the Chairman was actually rather interesting in a couple of respects. As advertised, he announced that QE II would indeed end and in response to a penetrating question yes, it was indeed a success. More interestingly, however, he seemed to indicate that QE III was not in the cards (expected), adding that inflation had turned out to be a bit higher than expected and that inflationary expectations were considerably higher. A real Dick Tracy moment, that. Nevertheless, he indicated that there was to be no real chage in the Fed's accomodative stance for the foreseeable future. The stock market loved it and moved smartly higher. Gold ratched up 22 bucks, silver moved up over 5%, oil futures stayed well above $112 (Brent $125) and the good ol' dollar went deeper into the crapper. Oh yeah, a strong dollar is in America's interest but that's really the job of the Secretary of the Treasury. The Suit must have loved that one.

The comments about inflation proved to be a bit of a surprise but he reverted back to the headline vs. core nonsense and of course no one asked him whether it wasn't about time to change the weighting of food and fuel from 20% to something that is more reflective of how people live. Then again, if they had he might have offered 15%. The guy is nothing if not confident. As to when they might tighten? Trust me, we'll know when to do it and we'll get it right. Uh huh. As to the effect U.S. monetary policy is having on emerging markets and their battle against inflationary pressures? It was a damn near reprise of ol' Jimmy Baker's greatest line: "The dollar is our currency and your problem." Do what you have to do and don't look to us. They're going to love that one in Singapore, Brasil and points east.

I still don't understand the lack of concern for the international view as to his policies. The Chairman, who seems to be a heck of a nice guy, is almost dismissive of what is a growing disgust world-wide. Maybe he is the smartest guy in the room and everyone else is a dunce. Could be, but it would be the first time that there was such a broad divergence of mental acuity among folks engaged in the same game. I don't think he's being disingenuous; I really think be believes he is absolutely correct and maybe he is, but I have a very helthy suspicion of pure academics--even one as bright as this guy. You know the old tale about an economist building his dream house? First, he assumes a foundation...In the mean time, I like my position in commodities.

News flash: The Greeks came to the conclusion that they are in worse shape than originally thought and need more money from their Euro buddies than is on offer. Who would have thunk it.