Bernanke speaks, dollar drops

For anyone wondering what was behind that late-day drop in the U.S. Dollar and the surge in nearly everything else - Fed chief Ben Bernanke was talking about the economy and monetary policy this afternoon in Washington, apparently squashing rumors that the central bank plans to raise interest rates sooner, rather than later, after Friday's labor report.

It looks as though the gold price jumped about $20 an ounce starting shortly after his speech began at 12PM EST and then another $10 in Asia. Thank God things are back to normal.

Those of you who keep track of this sort of thing might want to note this part of Bernanke's talk today where he asks himself whether he's going to cause higher inflation.

The answer is no; the Federal Reserve is committed to keeping inflation low and will be able to do so. In the near term, elevated unemployment and stable inflation expectations should keep inflation subdued, and indeed, inflation could move lower from here ... We are confident that we have all the tools necessary to withdraw monetary stimulus in a timely and effective way.

Hopefully he'll be better at seeing inflation coming than he was at seeing the housing and credit bubble forming and the collapse of financial markets last year.