Bernanke The Buddhist.

So the story goes that a student of Buddha is walking down a path and comes upon a dog riddled with maggot infected sores.  The student wants to help the dog, but doesn't want to hurt the maggots because their is no supposed hierarchy among life on earth according to Buddhism.  Therefore, the student removes the maggots with his tongue, thus not hurting the maggots and also illustrating another false religion on planet earth.  A Scientologist would have probably snorted the maggots.


As a capitalist, this little diddy doesn't thrill me either.  Not only do I love dogs, but I also recognize their intrinsic value to human society with the instinct to hunt, herd and protect.  Dogs have value.  Maggots destroy value, therefore, I will destroy the maggots.  My enlightenment can go to hell.

Mr. Bernanke can't seem to understand this process of discernment while formulating monetary policy. Buying back additional bad mortgage debt is akin to adding more maggots to our ailing best friend...the U.S. dollar.  We need a healthy, happy dollar, with a shiny coat and a wagging tail if we expect America to achieve long term sustainable growth.

To devalue our currency in hopes of increasing exports and thus creating jobs is a fools errand.  The multi-nationals will benefit as a result of quantitative easing to be sure, but those gains along with the other trillion dollars sitting off shore will never see the light of day in this country because of the archaic 38% corporate tax rate--the second highest in the developed world.  Capital will travel to destinations where it is treated best,  just as a dog will love the person best who feeds it.

Domestically, a slumping dollar will raise input costs to companies already being squeezed by lower margins.  They can only absorb so much before they have to pass the costs on to consumers.  Then Bernanke will receive his beloved inflation.  Gas, metals, grains and timber are all approaching price levels that resemble a commodities bubble.  When that bubble bursts, you know what we will have to show for it?

A dead dog.