Over last couple of weeks, Stop Trichet.com gained some attention, more so by leading mainstream media, as Reuters, Timesonline and Bloomberg covered it. When I checked it on 1st July, it had 6000+ signatories.  Presently it has 7000+ signatories.

Can we expect a StartBernanke.com initiative? Would it have more signatories or less? Going by the articles and comments in global online media, it should have more. 

Actions of the Federal Reserves and Bernanke can be best described by the word ‘inexplicable’.   

The only possible explanation could be they know something which the rest of the world doesn’t know. And it’s about Iran. Lately we have been seeing some coverage on it. 

Is there any possibility that leading US-based investment banks, battered by domestic crisis, now aided by the Fed. to prop up their capital, is trying to make some quick money by going long in oil and short in equities – mostly in emerging markets?  China, India and much of emerging markets quote at a discount to the US. If stocks are built on future expectations, growth rate of emerging markets should be much higher than the US, over next few years, under probably any eventuality.

OPEC has blamed US-led past actions in cutting-off 6-7 MBPD of oil supply. Another such action can lead to couple of more millions cut in OPEC exports, and endangering another 40% of OPEC supply through Strait of Hormuz. 

Under such a possibility, raising interest rate won’t slow down oil prices. It would rather increase the overall pain in the system. The think-tank of the Fed may rather allow the US-based investment banks to make some much-needed quick money to survive with this Iran opportunity. 

Under such a possibility, the rest of the world will have to bear the additional pain again, as it did so far by losing that much needed 6-7 MBPD.  

Otherwise actions of the Fed. are inexplicable. Time for StartBernanke.com?

Ranjit is an Associate Professor at Indian Institute of Foreign Trade, and is the author of the book Wondering Man, Money & Go(l)d.  Opinion is personal.

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