Strange music in the background is cause by the second article older than this one. The Iraqi constitution just passed (78 percent).
One of our former undergraduate students here at Harvard, Ben Bernanke, was chosen to replace the economist. The Reference Frame thinks it's a good choice. Bernanke introduced the concept of "goldilocks" to economics: not too cold, not too hot. This applies to inflation and deflation in particular.
We hope that he realizes that things could become too hot very soon and he will raise the interest rates to something like 6-7 percent sometimes in 2006. You know, the Americans are not afraid to borrow money. They're self-confident and optimistic enough which is one of the reasons why the U.S. interest rates should be, in average, significantly higher than the interest rates in other countries where the people are shy (such as Japan, obviously, but maybe also Europe).
Too low U.S. interest rates contribute to the huge U.S. trade gap; they may actually be the primary reason behind it. The more the Americans borrow as a group, the more they must import - ignoring "second order" effects such as the growth. :-) But maybe I should no longer give Bernanke lectures; as mentioned previously, he is a former student of Harvard. ;-)