When Ben Bernanke fights inflation, he will fight it with a stick. Contrary to popular belief, inflation is not entirely an issue of too much money chasing too few goods. Inflation is more influenced by the productivity of labor more than anything else. If the productivity of labor falls, prices will go up. Guess what? Latest numbers show productivity of labor is slipping. When prices rise, the Federal Reserve will fight inflation with a stick because that is the only tool they have and it will work as well as anything else they might try.

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