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The ETF-Squared: It Reallocates For You   The Fed Scales Back its Growth Forec...
May 22 2008 8:54AM EDT

Is Ben Bernanke Too Inventive?

Steve Waldman has a great description of the powerful and inventive Ben Bernanke today:

Our man Ben is like an Amadeus-cum-MacGyver, he's brilliant, unpredictable, he'll improvise a Delaware company from paper clips and vacuum up your derivative book with a toenail clipper.

The problem is, in the words of Steve's headline, that we seem to be suffering "a run on central banks," and that there's a need in such circumstances not for someone brilliantunpredictableinventive, but rather for someone stodgy and boring and predictable and trustworthy.

Steve sees high commodity prices as indicative of a loss of faith: in financial assets in general, and central banks in particular:

We lose faith. When we lost faith in Northern Rock, Bear Stearns, Citigroup, or Lehman, the central bankers stepped into the fray, and stood behind them. So, we ask, who stands behind the central bankers? We take a peek, and all we see is our own money. Which we quickly start exchanging for something else.

That "something else", of course, is "the only money that is no one's liability": commodities. Or, for that matter, art.

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