Cyrillic Partners

Currency speculator George Soros told students at New York University that the U.S.’s decades of borrowing are about to boomerang back on the economy and smack investors with: “a very serious economic correction.”

“We have borrowed an awful lot of money and now the bill is coming to us,” the Times reports him as saying. “We are definitely in for a slowdown that I think will be a bigger slowdown than Bernanke is seeing.”

Ouch! In your face, Bernanke! Who wins in the post-dollar-smackdown-world? China. The country is in for loads of sustained growth, Soros says. Quantum Fund co-founder Jim Rogers recently recommended investors drop the dollar like a sailor in a strip club, the Times reports. He also advised jettisoning any holdings in investment banks and American housing companies.

As if Bernanke didn’t have a hard job already, former Fed Chairman Alan

Greenspan has been throwing little economic grenades into the press-corps across the world—and they’re more than anxious to jump on them. Half-way across the world in Tokyo, the man said “housing inventory” and you could almost hear the economy deflating. “We still need to accelerate the rate of inventory liquidation, and that will mean bringing housing starts down and sales up. We have a long way to go,” the Times reports. “The critical issue on the whole subprime, and by extension the whole financial system, rests very narrowly on getting rid of probably 200,000 to 300,000 excess units in inventories in the United States.”

Right. Inventory equals badness. Got it. Then last week, the former Fed chairman went defeatist: “Will we have another crash? Yes. Will we have another credit crisis? Yes. Can we do anything about it? No,” the Times reports him as saying.

Not sure if that’s a slam or not. Is he calling Bernanke impotent or exculpating him from the griefers who will flame him as a failure? Tough to say for sure.

The question is this: do these high-powered pundits make Bernanke’s job easier or harder? The market responds to what they say, there’s no doubt about that, but does it help? Could the Fed use these luminaries to drive its own policy forward?

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