Bernake blames "resurgent demand" in emerging markets for commodity price increases

[hedge123]

As if an increase in demand for food, fuel, and other things that we take for granted in the West were a problem. Mr. Bernanke ought to follow his own advice and administer some belt tightening here at home instead of instructing other nations to do it for him. It's like the overweight patient telling the doctor to go on a diet and stop charging him so much for his medical bills.

http://www.nytimes.com/2011/02/19/business/global/19euro.html

'The Fed chairman said countries that have been maintaining undervalued currencies have “contributed to spending that’s unbalanced and unsustainable,” which, together with surging demand in fast-growing emerging markets, were fueling a worrisome rise in commodity prices.

“Spillovers can go both ways,” Mr. Bernanke said. “Resurgent demand in the emerging markets has contributed significantly to the sharp recent run-up in global commodity prices.”'

 

[olias]

Bernanke's right

 

[kashirin]

Quote from olias:

Bernanke's right

Bernanke is wrong

 

[Larson]

Quote from kashirin:

Bernanke is wrong

It is obvious that Bernanke is becoming a pathological liar in his chief role as blame -shifter. He expects people to believe this is a result of cost-push inflation? It is a monetary event, of which he is chief architect.

 

[hedge123]

'The true measure of the wealth of an economy is the pool of productive capital.'

Politicians seem to think printing money creates value. But until the public wakes up, they'll be right - the value to them is getting re-elected, not fixing the underlying structural mess.

Read more: http://www.businessinsider.com/some-thoughts-macro-value-and-austrian-2011-2#ixzz1EMBaoJjj

 

[jem]

it would likely be both.
if demand for an item outstrips supply prices go up.

so yes... worldwide demand can cause commodities to go up.

Also as you supply more dollars... the demand for dollars goes down.

So it takes more dollars to buy a commodity.

running the printing presses causes prices to go up... or in the case of housing not go down as quickly as it would have gone down.

 

[hedge123]

I agree with this. An excess supply of money increases prices, as does an increase in the quantity of an item denominated in money.

The fundamental issue I have with Bernanke is he only acknowledges the demand side, not the supply side.

Quote from jem:

it would likely be both.
if demand for an item outstrips supply prices go up.

so yes... worldwide demand can cause commodities to go up.

Also as you supply more dollars... the demand for dollars goes down.

So it takes more dollars to buy a commodity.

running the printing presses causes prices to go up... or in the case of housing not go down as quickly as it would have gone down.

 

[Random.Capital]

Oil production has plateaued in the face of every-rising demand.

Every commodity we use has oil as a major pricing input.

So indirectly, he's more or less right.

 

[Tsing Tao]

honestly, what else can he say? he can't quite come out with "yes, we know it's due to our policy at the federal reserve, but we have little choice."

if you believe in conspiracies, ben could be helping israel by bringing about the destruction of various arab countries (Iran most of all) through squalor over sky rocketing food prices.

 

[S2007S]

Bubble ben bernanke lying again!