It’s the ‘Bernank’ that done it!

Courtesy of Bruce Krasting

Bernanke has made himself (and thereby the entire Federal Reserve) the lightening rod for domestic and international inflation. What a dumb PR move that was. There are any number speeches by Ben and his cohorts where they stuck there neck out and said, “inflation is our goal”. Ben & Co. are going to eat those words. If you ask ten people if INFLATION is ‘good’ or ‘bad’ nine of them would say it’s BAD. It is the way we grew up. Ben is doing something bad.

A very small percentage of the population actually understands what the Fed is doing. Far more people have watched the YouTube cartoon explanation of QE than have listened to/read Bernanke. But a great number are aware that the Fed is engineering some inflation. So when they get hit in the head with some big price increase the first thing they are going to say is, “It’s the ‘Bernank’ that done it!”

Consider me as a case in point. I already pay a ridiculous $1,629 a month for health insurance. But today I get this nice letter from United Health telling me that the good folks at the NY State Insurance Commission have approved a 12.5% increase for just the next six months. I am looking at a 25% YoY increase in healthcare cost.

That NY State is granting 25% rate increases is a crime in my opinion. That Obama Care created a three-year window of maximum gouge opportunities for the likes of UNH is also a crime. The problems with health care and the cost of insurance can’t really be blamed on Ben and the Fed. But I suspect that many folks are going to blame him anyway. After all, he’s the one who wants inflation, so when we get it, the fingers of blame are going to be pointed in his direction.

There are millions of Americans who are getting letters like this. You will see stories in the MSM in the next week or so. "Insurance Companies Gouge Customers" is a good Thanksgiving story. It’s even possible that the crooks in Albany will be called on the carpet for allowing such an egregious increase in a basic cost of living. The boys at UNH will defend what they have done and just blame the increase on INFLATION in the cost of health care at every level.

I (begrudgingly) accept that Bernanke and the rest of the merry folks at the Fed don’t really want inflation that just eats up consumers. They want to see inflation from the demand side as evidence that the economy is in fact growing. But it is not going to go down like that.

Over the next few months we will see a number of big jumps in basic costs. Food, health care, insurance, transportation, gas and electric are all going up in price. We may not see the evidence so clearly in the headline numbers. My 25% increase in health care will not show up. That does not matter. Tens of millions of people will feel this pinch. There will be no blaming of OPEC, or China this time. The blame is going to be placed squarely on the shoulders of Bernanke and his vocal enthusiasm for ‘the’ inflation.

I will tell you that I was damn mad to see my annualized insurance bill go up by 25%. A lot of others will soon feel the same when they get a similar letter. Or when they look at their next electric bill, the cost of vegetables or even the price of a pair of jeans. A good number will say in anger, “It’s the ‘Bernank’ that done it”.

Bernanke has tied his success to a rise in inflation. America is going to absolutely hate that. Even greater public distrust of the Fed will inevitably follow. Politicians will jump on the bandwagon (they always do). The end result will be that QE will be a disgraced policy and the Fed will be weakened for a long time. Ben will get his inflation, he is also going to lose his job.