On Feb. 26, Federal Reserve Chairman Ben Bernanke provided testimony, and answered questions before the Senate regarding the state of the economy, and current monetary policies. In a response to a question posed by Senator Bob Corker of Tennessee, the head of the U.S. central bank stated that his record on inflation is the best of any Fed Chairman in the post war (WWII) era.
However, it appears that Chairman Bernanke failed to look at the actual data before making his statement, as a report from the World Bank on inflation and commodity prices shows that not only has the current head of the central bank been the worst Fed Chairman on controlling inflation, but his policies have led to record inflation in nearly every country in the world due to rising global commodity prices.
Senator Corker: So I think that, you know, I don't think there's any question that you would be the biggest dove, if you will, since World War II. I think it's something you're rather proud of.... Just wondering if you -- if ya'll talk at all in your meetings about the degrading effect that's having on our society.
Chairman Bernanke: You called me a dove. Well, maybe in some respects I am, but on the other hand, my inflation record is the best of any Federal Reserve Chairman in the post-war period, or at least one of the best, about two percent average inflation. - Zerohedge
Click on the Slideshow to see the Commodity Inflation chart
As you can see from the chart, not only have commodity prices risen to all time highs, but the percentages of increase since Chairman Bernanke took office are unprecedented, even when compared to the stagflation era of the 1970s and early 1980s. The catalyst during that time in the U.S. was an oil crisis and embargo, as well as seeing gold and silver reach record highs. Yet, since Chairman Bernanke took over the Federal Reserve in 2006, the price of cotton, corn, gold, and oil have all reached new highs, sometimes doubling their previous record price (Gold $800 in 1980, $1950 in 2012).
The Federal Reserve tends to trust in government reports on inflation, which only deal with specific price elements that do not include food, energy, or rents. In that, the Fed Chairman has great leeway in manipulating inflation numbers to fit a desired monetary policy. However, the markets are the true determiner of price value and inflation, and the best example was seen in 2011 during the Arab Spring, where inflation created global food prices to soar, and led to revolution in many Middle Eastern countries.
One of the two prime objectives of the Federal Reserve is to control inflation through direct monetary policies and discretion over interest rates. In this, the central bank has failed to stem inflation over the past decade, and instead has focused their monetary policies towards artificially propping up equity markets. With gasoline prices for February being at an all-time high, and true inflation running between 6 and 8% per year, Chairman Bernanke's assessment that his term in office has been the best at holding off inflation since the post-war period is either ignorant to the data, or a bold faced fallacy.