From NRO’s Corner:
Reuters reports Bush will tap White House economic adviser Ben Bernanke as the new Fed chief. I know nothing about Bernanke, but the Dow is up a bit today, so perhaps this is a good choice.
Actually, it’s a disastrous and entirely predictable one. I called this one back in June, as did virtually every other contrarian who saw how Bernanke was being given more face-time in the media. Now does that prediction of a Rodham administration today look a little less implausible?
Bernanke is the one who believes that all financial problems can be solved by increasing the money supply ala the magic printing press. However, this doesn’t mean that he’ll actually be successful in inflating the US economy out of recession, as he’ll likely run into the “pushing on a string” problem that so worried Greenspan.
It’s still uncertain whether the deflationists are correct, but a healthy mix of cash and gold should keep one in decent shape, even if it won’t render you wildly wealthy. Remember, self-preservation is the main point in a bear market, so don’t get carried away in thinking that because you’re ahead of the crowds, you’re ahead of the game.