Bernanke made a little remark that is receiving little attention, although it should. He said that the trade deficit the US has with the rest of the world could be corrected by a six percent drop in the value of the dollar. He wasn't advocating that drop, but assured America that if it did happen, not to worry. Our economy was strong enough to handle it.
In what sense, Econo-Girl asks. Since much of consumer goods are imported, it means that the price of imported goods would rise six percent, right off the bat. And that assumes no escalating in the price rise as retailers fear a continutation of that rise and their prices go up to meet the level of their fear.
And what effect would a sudden rise in prices have on your personal economy? So what is he talking about? He is the Fed Chief. He knows that prices will rise for everyone if the dollar drops in value to that extent. Does he think most people will take that in stride?