Nassim Taleb is the brilliant author of the “Black Swan”, which described how huge, unpredictable events occur, such as the current market collapse. This morning, he said the current Chairman of the Fed, Ben Bernanke, has performed poorly and should not be re-appointed when his tenure as Fed Chair expires in January. A survey of economists by The Wall Street Journal was also released today, showing 71% of them disagree with Taleb and think Bernanke should be re-appointed by President Obama.
I also think Bernanke has done a remarkably agile job and hope he will be confirmed. It was fortunate that we had one of the leading authorities on the Great Depression as Chair of the Fed during the Great Recession. But, the re-appointment of Bernanke is a “canary in a coal mine” for me. If he is re-appointed, there is a chance the inflation could still be controlled. However, if he replaced by someone less independent, as any President would naturally hope, I fear a return to 1970s-style of inflation. We'll see . . . .
