Dalai Alan and Helicopter Ben may propose, but the markets dispose

I have long thought that Alan Greenspan would have made a passable Dalai Lama. Those gnomic utterances, that air of inner calm, that instant access to a deep well of understanding…. The faithful have come to accept that the chairman of the United States Federal Reserve Board is the embodiment of power and wisdom, and they are now preparing themselves for his next incarnation. Ben Bernanke, sometime winner of the South Carolina state spelling-bee, then professor of economics at Princeton and authority on the Great Depression, is told that he will soon be the most powerful man in the world, and is so wise and clever that all will be well. To look the part, that little jutting beard may have to go; long, white and wispy would be better…. In what, though, does his power reside? Why, he is the man who fixes the price of the world’s dominant currency. (It went up again this week.) To be precise, this is the Board’s job, but he may prefer to be in the majority. Even that overstates his authority. Prices are made in markets, and there are limits to his powers to tell markets what to do. James Grant, Wall Street’s level-eyed observer of interest rates, warns him: ‘If America’s creditors sense that inflation is robbing them of their wealth and the Bernanke Fed is too slow to act, they will sell their dollars.’ Holders of US government bonds have been selling them, and the rate of interest that they return has been rising sharply. James Carville, President Bill Clinton’s crafty adviser, once said that in the next life he would like to come back as the bond market: ‘You can tell everyone what to do.’ He did not ask to be reincarnated at the Fed.

G. William Who?