Maybe on reflection Fed Chairman Ben Bernanke has a plan. We once referred to him as Ben "Machiavelli" Bernanke based on the potential feedback loop of his unprecedented 24/7 helicopter-drop monetary policy. Maybe Ben's hidden Machiavelli is back.
Interestingly, we all know that inflation is a monetary phenomenon. But what if given the convoluted imbalances in the world economy, this time the inflation call is much trickier.
Let me try to encapsulate my Machiavellian monetary hypothesis...
- We know loose US monetary policy translates direct inflationary pressure to emerging markets (EM)