So with violently spiking oil prices and an anaemic, weak US dollar, Ben Bernanke warned of the dangers of inflation and thus the market reacted accordingly.
By stating the obvious, he increased the strength of the dollar; reduced the oil price; the Dow had a positive day "and G-d saw everything that he had made, and behold, it was very good".
But it can't last. The dollar needs a fundamental reason to strengthen not just words from a political appointee.
So what Chairman Bernanke really did was give market traders a road map for how Tuesday was going to play out and they took his direction.
Within a couple of days we'll be back in the real world.
No comments:
Post a Comment