Bernanke May Get Aggressive on Inflation Soon
Jul 9th, 2008 | By Erika Nolan | Category: Politics & EconomicsEveryone knows Bernanke is currently a dove on inflation says Erika Nolan in The Sovereign Society. But he may turn hawkish soon…
If you’re in the currency world, you’ll often hear about an inflation dove or an inflation hawk.
Usually in the news, the talking heads are discussing our very own dove, Fed Chief Ben Bernanke or the eternal inflation hawk, European Central Bank (ECB) President, Trichet.
But what’s the difference?
A hawk is known to be an aggressive predator that keeps a sharp eye out for potential prey. In a similar fashion, a “hawkish” central banker keeps a sharp eye on interest rates because they’re ready to swoop in and aggressively raise rates to fight inflation if necessary.
The dove has a harmless, docile nature. Therefore if you hear a central banker referred to as “dovish” or called an “inflation dove,” then he’s not concerned with inflation (think Ben Bernanke when he refuses to hike rates). He would rather lower interest rates because he feels inflation will have a minimal effect on society.
So these terms don’t describe the central bankers’ long-term stance on inflation, but just their current short-term views. These are likely to change over the course of their tenure.
During any Fed chairman’s tenure, he’s likely to raise interest rates and then lower them depending on the economy’s situation at the time. So the present view of the central bank is termed “hawkish” or “dovish.”
Up until now, “Uncle Ben” has proved he prefers doves to hawks. But down the road, he could change his tune (he’s known to do that every once in a while).
Source: What Gives a Dove His Wings?
Advertisement
This is a rather unusual story…
Recently a team of Harvard and MIT researchers made a scientific breakthrough that has unlocked the "predictability" of exotic investments. In fact, using just a few proprietary "trigger" signals… 84 "Big Game Hunters" had the opportunity to experience what most Americans never will - $232,500 in just 71 days.
While these kinds of profit opportunities fly well outside of most people's "comfort zone"… those who consider themselves "Big Game Hunters" should absolutely consider implementing this methodology for themselves.
Read on to discover every detail of this phenomenon.
