Federal Reserve Chairman Ben Bernanke said the Fed will tighten interest rates when the economy “has improved sufficiently.” That’s like an 18-year old boy saying he can avoid accidents with the pullout method. Both experiments have failed the test of time.

In this case, Bernanke is asking you to suspend your disbelief and double up on the Xanax as the value of the US Dollar continues to swirl around the toilet bowl. Since the Federal Reserve got President Roosevelt to tinker with the gold standard, the US Dollar has lost over 95% of it’s value:

Source: Zerohedge.com

I am not wearing the “3-D Inversion” glasses sent by the Treasury Department last fall. Thus, the chart above seems to indicate a very poor record regarding perfect balance between loosening and tightening the printing press spigot. Not convinced? Admire this sweet chart:

The Pragmatic Capitalist concludes: “The curse of cheap money has been felt by everyone over the course of the last 30 years as we promote an unstable and deeply harmful boom bust cycle.”

There’s a reason the value of gold hit an all-time high recently. Many investors are betting Bernanke will impregnate the economy with too much money. Disagreeing with that thesis means you believe Bernanke will perform an unprecedented magic trick immediately after deploying the most fiscal stimulus in history.

How does this affect us? If Bernanke doesn’t walk on water, we are well on our way toward shittier purchasing power and another sweet whip-saw job market. If you want to show Bernanke the value of his bold claim, flush twice because it’s a long way to Washington.

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