Clueless Ben blames the commodity price increases for inflation, not realizing, that commodity price increases are inflation

Clueless Ben finally admits there is inflation, but that it will only be transitory.  If that is the case, then what was the point of QE1 and QE2?  Wasn't it supposed to increase our inflation up to or around 2%?  

Others at the Federal Reserve, including Hoenig, Plosser and Fisher think inflation is a real danger to our recovery.

Bernanke says that our current inflation will not persist because it is commodity driven. According to Bernanke, the supply, demand issues which are currently at play with food and energy will come down, and inflation will revert to its 1.0% norm.

What Bernanke doesn't get is that money is fungible.  When you are printing money, consumption items get inflated, investment objects get blown into bubbles.  When we have commodity prices increasing, it passes through to all the products that use those base materials.  Via DB:
Federal Reserve chairman Ben Bernanke expects the recent increase in US inflation, which, he says, is due mostly to increasing commodity prices globally, not to persist.

The comments come in sharp contrast to the pronouncements of a number of US central bank officials, some of whom have argued that the time had come for the Fed to tighten monetary policy.

On the same lines, Bernanke has argued that supply and demand factors were driving energy and commodity costs higher. However, these would eventually stabilise, allowing the US to avoid any inflation troubles.

"I think the increase in inflation will be transitory," Bernanke said in response to questions after a speech. "Our expectation at this point is that in the medium term inflation, if anything, will be a bit low. We will monitor inflation and inflation expectations very closely."
Santelli rebuts on CNBC


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