August 8, 2011
Dear President Obama:
I sincerely hope that Bernanke does not make any suggestion of doing a QE3 tomorrow.
If you want to get re-elected, keep a laser focus on the price of gasoline. If it is under 3.5 or so all of 2012 I think the economy will take care of itself. This is the item that we have to buy, the ordinary person driving a car, the small business, the farmer, and the large business. We have been squeezed into a tight space by the rise in its price and have to cut down on our activity because we cant make any more money or raise prices ourselves. The price of gold, or stocks, is mostly irrelevant. Further inflation in gasoline or food is what would kill us. The bankers and fat cats will be unhappy and vicious if there is asset price deflation, but it works for the regular Joe if he stays employed. But there are less of them and more of us. So let it happen.
I notice the price of oil has dropped to $78/barrel with all the wrangling. This is a good thing, let it keep on happening. With the debt ceiling deal, across the board budget cuts, and the roll back of the Bush tax cuts will happen of their own accord if Congress can't get its act together. So let there be stalemate and let it happen. But make sure the price of gasoline drops below $3.5/gallon or even $3/gallon.