As noted during the week of 2/18, hyping commodity price is exacerbating inflation. The stagflation debate started during the week of the late commodity hype. Even though Bernanke thinks that we will not have stagflation, the vicious cycle will be feeding into the market price actions as we have seen it during the last two weeks as oversold markets could not bounce off from the major supports.
Whether Bernanke is playing politics now as TS Paulson did with his comment on strong $USD, we will know; however, he has not lost his credibility except with "helicopter Bernanke".
Hopefully, we will see a stop to vicious cycle of feeding inflation through commodity price hype.
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