Government mouthpiece and well known Keynesian economist Paul Krugman makes the case for monetary easing and Fed intervention by claiming that the rising cost of food and gas has nothing to do with the Federal Reserve and easy money dished out to banks, both foreign and domestic, to the tunes of not billions, but tens of trillions of dollars.
The latest economic theory from the Nobel Prize winning economist suggests that the Fed and government intervention couldn’t possibly have anything to do with US dollar depreciation – not for the last hundred years, and certainly not today:
Food and gas is not something that’s being driven by Fed policy. Sorry, but Ben Bernanke doesn’t have that much power. That’s being driven by events in China. That’s being driven by events in a large world economy.
The dollar hasn’t gone down. That’s the amazing thing. If you actually look at the Dollar vs. the Euro, the Dollar vs. the Yen, it has not. In terms of the world’s other major currencies we have not had a big depreciation of the dollar.