~BIZZ-WORLD~

An open letter to Mr Ben Bernanke, chairman, US Federal Reserve:Sir,

Decades back, one of your predecessors splendidly captured the post-gold standard and the consequent free float of the US dollar scenario rather succinctly when he termed the US dollar as ‘our currency, others’ responsibility.’

It is this responsibility cast on outsiders like me that compels me to write this open letter to you.

As I write this, I am fully conscious of the fact that we are living in exceptionally troubled times. I am equally conscious of the fact that being the chairman of the US Federal Reserve, you are in effect the central banker to the entire world. Surely, it is an unenviable position.

Your actions, sir, not only impact the United States economy, it does have the potency to impact the global economy. That explains, partly, if not wholly, the ‘why’ to this letter.

Yes, I am indeed aware of the sub-prime crisis that has engulfed the entire global financial sector. I am sure you are fully aware as to how your predecessor, Mr Alan Greenspan — one of the most influential economists of our times — described the sub-prime crisis in his book — The Age of Turbulence. According to him the American economy was ‘facing not a bubble but a froth — lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy.’

Yet, as events turns out, I suspect, Alan Greenspan is wrong. But the point is not merely the judgemental capacity of Alan Greenspan. Rather, it reflects poorly on the American regulatory mechanism.

After all, wasn’t he the product of a system that was repeatedly touted as fail-proof; at least in surveillance, supervision and regulation? And my worry is that you too are a product of the very same system that has compelled him to be wrong.

Saving US economy from the US Fed!

In fact, the starting point of the present conundrum was the American assumption about globalisation. In hindsight, your assumption that the world was ‘flat’ seems to be incorrect. In fact, it was skewed, tilted, slanted — anything but flat.

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