See Frederick Sheehan's Interview on "The Larry Parks Show" (Janurary 12, 2012)

Federal Reserve Chairman Ben S. Bernanke has finally achieved his childhood fantasy. He has passed into existence (note: not law, regulation, or any other formal apparatus that cannot be ripped from his bodice by the People's Representatives) a policy of achieving 2.0% inflation.

From a January 25, 2012, Federal Reserve press release: "The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate." (For the prelude to his ploy, see: "Presidential Rivals: Drop the 'One Percent.' Trumpet the 'Negative Four Percent.'" and "A Quartet of Fed Chairmen Body Slam Bernanke.")

"Personal consumption expenditures" are calculated by the Commerce Department. They have been rising at a 1.7% annual rate. This must be why the ad lib policymakers at the Fed drop-kicked the CPI (consumer price index, calculated by the Bureau of Labor Statistics) into the Potomac, since it is rising at a 3.0% annual rate. The pilferers might still have chosen the CPI, after dropping food and energy: a measure Chairman Bernanke often talked about. The ex-food, ex-energy CPI rose at a much-closer-to-target 2.2% over the past year.

Whatever the Fed's reasons for siding with personal consumption expenditures, the BLS states (in its December Consumer Price Index Survey) that food prices rose 4.7% over the past year. Dairy and related products rose 8.1% in 2011. From the American Petroleum Institute: gasoline prices have risen 9.5% over the past year. McDonald's announced on Tuesday that it is increasing prices again - it did so three times last year - due to higher costs. That probably includes transportation. The recently released Cass Freight Index (through December 2011) noted that North American freight costs "were up an astounding 18.8% against an increase in freight volumes of only 0.7%."

After the Fed press release, Burglar Ben held a press conference. This is part of his "transparency" ploy. Among other oddball comments, the math whiz claimed: "At levels of inflation this low, interest rates should fully compensate for the losses to savers." To approximate, current savings rates in the United States are about 0.0001%. The Fed's press release left a clear path for someone to bludgeon the Bernanke Fed. (Nobody will, but we can pretend.) From the aforementioned press release: "The inflation rate over the longer run is primarily determined by monetary policy...." Monetary policy is in the hands of a man who cannot subtract.

It is slowly becoming clearer that Alan Greenspan should be warming up in the bullpen.