Ben Bernanke must somehow keep interest rates below 11.1% or 100% of the US Government's income will be paid solely to interest costs rendering the Government insolvent.
The problem is if he holds interest rates at artificially low levels much longer, the US dollar will go into hyperinflation.
Paul Volcker had two options: Hold interest rates artificially low and destroy the US dollar in a hyperinflation or allow the market to achieve its natural interest rate level (which ended up being nearly 16%) and allow the game to continue on a while longer.
Ben Bernanke also has two options: Hold interest rates artificially low and destroy the US dollar in a hyperinflation or allow the markets to achieve its natural interest rate and bankrupt the US Government, destroying the dollar.
Both of Bernanke's options end up in the destruction of the US dollar.
It is little wonder that Volcker didn't want to stick around to have his picture taken on the day that happens.
http://www.stockhouse.com/Community-News/2011/Jan/6/Why-Paul-Volcker-is-leaving-Obama-advisory-panel
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