WILL WE END UP WITH A TIPPY CANOE…AND BERNANKE TOO?
(…trying to keep an economy on an even keel is a tricky balancing act)

Fed Chairman Bernanke’s recent pronouncement about possibly easing back on the stimulus throttle, to let interest rates rise a bit, sent Wall Street into a brief tizzy. How dare he screw up their easy money fun and games…so profitable for them since 2008!

I became arithmetically “challenged” at an early age and have had to take my boots off to count to twenty ever since. Well, not quite. As time went by the imperatives of adult life eventually beat a stronger capability in that department into me. One of the lessons from all that was that 2+2 rarely equals… 5.

The other lesson also eventually learned…though I have no claim at being an economist… was that economies are dynamic organisms, not static ones, so they are in constant motion. A motion much like a see-saw or, perhaps, more closely resembling a…canoe.

Anyone who has ever gotten into and paddled one knows how potentially unstable they can become, and, the more one tries to counter any side-to-side “wobble”, the more unstable that wobble becomes, and eventually…splash…you find yourself in the water.

Trying to keep an economy on an even keel is much the same problem. No matter how carefully or delicately one tries to calibrate and manipulate fiscal policy, and any depressive or inflationary effects deriving from that…the wobble effects between them sooner or later overcome such efforts.

The Chairman may be an extremely skilled calibrator and manipulator while managing our economic canoe, but we may still may be soon asking ourselves…will we end up with a tippy canoe…and Bernanke too?

CENTURION