Re: Raul Paul Roasts Bernanke
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The most ridiculous argument Bernanke threw out there was IMO, that retirees aren't hurt by a devaluation of the dollar, because they're buying consumer goods with the dollar? If the dollar is worth less, than companies have to charge more, ldo?
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keep going with your example. you'll find that on the whole, companies will not increase prices for a number of reasons. so by going the company passing charges through route, you'll see that the actual costs paid in dollars aren't anywhere remotely close to the change in the value of the dollar on the int'l market. it would be like saying "omg, the dollar is strengthening, companies are charging less so we have more mani." by "we" i obviously mean those who consume almost entirely in dollars. in reality, it is the company that reaps the rewards in the form of higher margins. there are a ton of other variables here but i'm talking in the aggregate. the change in value of a dollar on the FX market doesn't have a big effect on those that consume almost entirely in dollars one way or the other...
overall, that answer was one of his better ones imo.
historical tests bare this out also (a reduced dollar doesn't have a huge effect on those that consume almost entirely in dollars).
Barron
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